A couple of years ago, I was sitting with Hannah Ellis in my office, which also happens to be my house. This is in a corner of northern Fitzrovia, just south of the Euston Road and a little west of the Tottenham Court Road. The customary, if slightly incredible, quiet had settled on the largely empty square outside the window. We were talking about Hannah’s grandfather: Dylan Thomas. The centenary of his birth was then still two years away. I had undertaken to produce a drama for BBC2 to coincide with this, about his death at the shockingly early age of 39.

We had already had the outlines of a script from Andrew Davies. Now we needed Hannah’s assent. This was sensitive material. Dylan died in the throes of a last deadly wrestle with the distractions of New York. The city, any city, always seemed to be a dangerous embrace: an escape, a whirlwind, a place for excess. Would Hannah allow us to portray the story of the “18 straight whiskeys” he allegedly sank before his collapse; the struggles with her grandmother, Caitlin; the parties and the dirty limericks and the womanising? She did.

That morning we talked about the full range of Dylan’s life. Andrew had set part of his screenplay in Laugharne around “the Boat House” and the all-encompassing green of Carmarthenshire. But I pointed out that we were sitting, at that moment, in the middle of his alternative place of dreams: the all-encompassing grey of Fitzrovia.

The Fitzroy Tavern, a favourite Thomas haunt Photograph: Martin Godwin/Guardian

Across the square in Conway Street, Dylan and Caitlin took lodgings. A few years before that, he lived 100 yards down the road at 12 Fitzroy Street. He met Caitlin in The Wheatsheaf in Rathbone Place, laying his beer-fuddled head in her lap and stealing her away from Augustus John. He drank in every pub in the district and roamed the restaurants and clubs. He worked at the BBC and played nightly to his amateur audiences across Fitzrovia.

There was always a duality to Dylan and his work. He told Lawrence Durrell that London “gave him the willies”; he wrote that it was “an insane city” and it “filled him with terror”. His greatest poetry seems to long for the pantheistic energy of nature. But was he as much a London writer as a Welsh one? Sometimes he yearned for escape from “promiscuity, booze, coloured shirts, too much talk too little work”, but he kept coming back for another round.

When I sat with Hannah, they had already planned celebrations across Wales to mark his birth. But we seemed to be doing little in London. Hannah and I decided that there ought to be some remembrance of “knickerless women, enamouring from the cane tables, waiting in the fumes for the country cousins to stagger in, all savings and haywisps”.

That’s why there is a Dylan in Fitzrovia festival, which will kick into life this Monday with the arrival of “the replica writing shed”: the hut that stands on the cliff above Laugharne. It’s a long way to Carmarthenshire, where Over Sir John’s Hill was written and much of Under Milk Wood conceived, so we have brought it here. We will have screenings of the drama Andrew Davies wrote and Tom Hollander starred in. There will be readings and literary pub crawls. There is jive and jazz and an England versus Wales Grand Poetry Slam.

For me, this festival is about Fitzrovia, too. I have worked in the place all my life. Originally, I didn’t much care for it. I joined the BBC Comedy Department as a junior trainee producer in 1976. They were temporarily housed in Grafton House. It’s a rough-cast, boring, concrete building just round the corner from Portland Place tube. The Euston Road blathers noisily past. I remember my first lunch break. We stood outside the nearest pub with a scent of black-oiled dirt on a white-skied, 1970s London day, and I tried to show interest when a senior producer demonstrated the leather pouch for his Bic lighter, worn as a medallion around the neck of a bottle-green, splay-collared, satin-look shirt.

I know this “quartier” better now. I live there in the Fitzrovia of undiscovered nurses’ swimming pools and obscure modern art galleries, flute shops, play-script vendors and Cypriot tailors. Several wrecks that feature every year on the English Heritage “Buildings at Risk Register” lean precariously close to millionaire mansions. An original toyshop that Dickens visited still thrives. Prostitutes and brothels discretely hide in basements. Cartoon studios occupy premises next to corner fruit shops. Dentists, doctors and trichologists inhabit fine 18th-century townhouses.

With wife Caitlin in Laugharne, Wales in 1938 Photograph: Nora Summers Estate

Those seeking expensive bridgework or dainty weaves probably know nothing of the chapel behind the ruined carcass of the Middlesex Hospital where Kipling lay in state, or of the Welsh dairies that once took their milk from Mid-Wales via Paddington and built their meeting-house. It doesn’t matter. Everyone is passing through here. Nobody dominates this place. There is no ghetto. It is neither run down, nor spruced up, too rich or too poor. It is a walking space between four great arteries of London.

Lacking the obvious night-time economy of Soho, it may be superficially less raffish, but has Soho lost its soul? Fitzrovia still retains the scrabbling inner-city mix that Dylan Thomas plunged into when he first came to London in 1934. He called it “capital punishment”. Fitzroy Street – and the extension into Charlotte Street – has been home to Constable and Walter Sickert. The Camden Town group met here. Saatchi and Saatchi based themselves here in the 1980s. Channel 4 followed. Face it, the creative centre of Britain lies in these streets, not perhaps the airy-fairy spiritual creative centre, but certainly the Grub Street hack coterie, make-a-living-off-my-wits writers, artists and chancers’ creative centre.

Dylan spent most of the war working in London. But by the end of the blitz, he was beginning to get wary of the city. It wasn’t as if this poet grew tired of London – it was that London seemed to wear him out. Since 1934, when the “Rimbaud of Cwmdonkin Drive” had first hurried to join his artist friends in their digs, to sleep on floors and to venture slightly nervously into the pubs of literary and artistic renown, Thomas had become addicted to the everlasting party, the hot excitement of the saloon bar. But, as his friend Trevor Hughes noted in the Fitzroy Tavern, “Dylan did not want to drink – no, he wanted to talk.”That may have changed. Later commentators noted that he would arrive and line up the beers on the bar like soldiers in rank, in order to knock them back. There have been quite a few ready to condemn him on this centenary anniversary. Quite a few ready to “reclaim” his work from his reputation. Quite a few who want us to stop concentrating on his excesses and read the verses. There are not many who seem to have any sympathy for the road he travelled.

Dylan Thomas in 1950 Photograph: Hulton Archive/Getty Images

Surely, it was the duality of his life, the curiosity for company, the furious clowning, the infantilism, the immediate and instant affection, exactly the stuff that can irritate quieter more diligent writers and critics, that fuelled his most vivid verse. Why does Under Milk Wood continue to enthral when The Family Reunion sits on the shelf? It reaches down. It sets itself among ordinary people. It has the public bar and the post office and the chatterbox stranger written through it. And perhaps a certain straightforward commercial nous? Dylan worked for the Ministry of Information in the 1940s, and it was the post-propaganda film Dylan who wrote that work.

Dylan disdained the label of surrealist, but his characters use their fantasies to free themselves from the buttoned-up village and its closed minds. In the streets of Llareggub, they gossip, sniff and sneer, but in their private soliloquies they lust and seethe with forbidden desire. There were no small-town constraints in Fitzrovia. An artist could properly lead the bohemian life, alongside nude models, raucous painters and their mistresses, and the “regulars, wits and bums” that Julian MacLaren-Ross described.

By all accounts, there was no single Dylan Thomas loose in London in the 30s and 40s. For every account of the “ugly suckling”, as Geoffrey Grigson and his friends dubbed him, the sponger or the weaving drunk, there are others of his excessive generosity with money and his sober dedication to work. He was quite capable of behaving primly in the company of TS Eliot and Edith Sitwell, and then “letting the side down” at some gruesome, organised dinner.

Julian MacClaren-Ross remembers that he once suggested they get a bottle in: “‘Whisky? In the office?’ He seemed absolutely appalled.” In the 40s, when the two of them wrote propaganda films for the Ministry of Information, Dylan arrived on time, wore a suit and was liable to work more conscientiously than Julian thought necessary. The landlords of various pubs claim that they never saw him drunk. In the mid-40s, he largely stuck to beer. It made him bloated.

Thomas at work at the BBC Photograph: BBC/PA

Dylan Thomas was not a household name until 1945 and the success of Deaths and Entrances. Before that, he was known to (and part of) an informed circle. He worked in a recognisable world of the freelance media creative dogsbody. Journalism was not his métier. Instead, he picked up advertising or films or bits of short story. Perhaps today he would have written television, then he worked for the radio, and as much as an actor or “voice” as a writer, turning out for the radio producer Douglas Cleverdon, but also for John Arlott, later the cricket commentator, who cast him often and seldom had cause to complain of lateness or indifference. By the late 40s, Dylan was making 20 radio appearances a year, turning up to read, or appearing as a critic or a guest on a panel.

I suspect for some the rituals continue today. If ever on it, I usually finish Loose Ends and walk home. They kindly invite me to the pub, but I had to stop drinking 30 years ago: another Welshman with a light head and an endlessly expandable beer stomach. When I was 24, though, the pub was my life. That’s where we went for lunch after a morning at the typewriter. It’s where you left without lunch to descend into a dank basement afternoon-drinking club, before heading out to another pub, meeting a writer, fitting in a recording in the evening and perhaps the odd call to an agent, and then a move to a restaurant you couldn’t afford, where other people left because of the noise you were making and you ended up sitting on a hard bench in Marylebone police station waiting for a mate who had kicked in a ventilation unit at midnight in Great Portland Street, “because it looked like something that needed kicking”. I don’t recall it as sad or degrading. It’s a Fitzrovia life.

• The Dylan Thomas in Fitzrovia festival runs 20-26 October. Details: dylanthomasfitzrovia.com