I will review some
recent progress in understanding how entanglement entropy is computed in holography. I will show that under certain circumstances the entanglement entropy can be associated directly with the Gibbons-Hawking term in general relativity. Then I will show how to derive the Jacobson-Myers area functional for Lovelock gravity from a first principles approach proposed by Lewkowycz and Maldacena. Using a regularization of squashed cones, I will demonstrate that Wald entropy in the Fefferman-Graham background of the squashed cones can capture the correct universal terms. Finally if time permits, I will examine how entanglement entropy can be used to constrain gravity theories.