I myself think that Gwyn somehow found out that the Flame was feed with Humanity and that when it started to fade in some way it "corrupted" the humans goving them the curse and turning them hollow but that could also be done on purpose and controlled.There are theories supporting both. Some say hollowing only happened as a result of Gwyn maliciously using humanity to link the fire. Others say there is no evidence that he actually did anything of the sort and hollowing is a natural consequence of the fading of the flame.
I'm with the later myself.
The whole Way of White and the Chosen Undead bullshit was his plan to have all those infected with the curse "feed" the flame... at least he did feed the flame too with his own life so that makes him a bit more noble since he is willing to do the sacrifice himself