The young winger opened the scoring with a low strike from 20-yards after breaking up the pitch unchallenged in the 12th minute and his assists for Paulinho and Roberto Soldado were equally as eye-catching.
Townsend beat his defender on the right wing with ease before crossing for Paulinho to head home, and the 22-year-old put another goal on a plate for Soldado with a fantastic run and cross early on in the second half.
Danny Rose scored with a stylish curled effort and Soldado grabbed his second of the match after a pinpoint cross from substitute Nacer Chadli to secure a comfortable victory.
Andre Villas-Boas once again signalled his intention to compete seriously for the Europa League this season by naming a strong side.
Etienne Capoue made his full debut for the Club while Younes Kaboul captained the side on his return to first team action, with Soldado leading the line in front of the noisy Tbilisi fans.
After keeping the ball well early on we did not have to wait long for the first goal of the night.
Michael Dawson headed a corner clear, Kyle Naughton won a tackle and the ball broke to Townsend who broke forward with pace.
With few options to his left or right - players from both sides were struggling to keep up with the 22-year-old's speed - Townsend took aim and drove the ball past Loria from just outside the box to score the fourth goal of his Spurs career.
Lloris was a spectator for much for the match but prevented Dinamo equalising with a brilliant save in the 24th minute, showing fantastic reactions to turn Dvali's glanced header across goal around the post.
Paulinho had a couple of off target long range efforts as the half wound down but the Brazilian opened his account for the Club just before half-time thanks to brilliant work from Townsend once again.
Townsend latched onto Naughton's chipped pass down the right wing before beating his man, turning him inside out and dinking a perfect cross to Paulinho a couple of yards out for the Brazilian to head home.
Any hopes the Dinamo fans had of a second-half comeback were ended in the 58th minute when Townsend once again burst past a defender before picking out Soldado in the six-yard box to provide the Spaniard with (by his standards, anyway) an easy finish to make it 3-0.
The scoreline continued to tick over with the goal of the night scored by Rose, the full-back swinging a powerful left-footed shot over Loria and into the top corner. The strike even had the Dinamo fans applauding as they accepted their team's fate.
Soldado had his second goal moments later in the 67th minute, Chadli the provider this time with a brilliant cross from the left which the 28-year-old side-footed home.
Harry Kane's header hit the woodwork before Tbilisi put on a bit of late pressure in search of a consolation goal in front of their passionate fans.
Dvali and Grigalashvili forced Lloris into action but in the end, 5-0 was a fair reflection of the chasm between the two sides on the night.
Another European adventure has begun.
Spurs (4-2-3-1): Lloris, Rose, Kaboul, Naughton, Dawson, Paulinho (Carroll, 71), Capoue, Townsend, Sigurdsson (Chadli, 61), Soldado (Kane, 71), Dembele. Subs not used: Friedel, Walker, Fryers, Coulthirst.
Dinamo Tbilisi: Loria, Kvaratskhelia, Dvali, Merebashvili, Khurtsilava, Kvirkvelia, Grigalashvili, Xisco (Vouho, 42), Gvelesiani, Glishich (Papava, 46), Dzaria (Goga, 81). Subs not used: Zarqua, Ustatitz, Khocholava, Seturidze.
Goals: Spurs - Townsend (12), Paulinho (44), Soldado (58, 67), Rose (65).
Referee: Mr P Van Boekel (Holland).