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Installing recessed toilet paper holders is a little different than the typical toilet paper holder installation. Because the unit is recessed in the wall, you need to use different tools, including a good drywall saw.
Your first step is to measure the size of the hole you will need to cut in order for the recessed paper towel holder to sit properly. It is helpful to create a mold of the size and use it for outlining. Next, once you have clearly marked the lines of your hole, use a drill to open an access for your saw. Once you can get the saw into the gap, you can begin cutting out your needed space. You can also use a drill bit to cut out the hole, but a jigsaw will give you the cleanest lines.
Now that the hole for the recessed toilet paper holder is made, you will need to slide the holder into position within it. Your unit may have either screws to affix it to the wall, or built in latches that only require assistance in locking in place. Either way, consult your instruction manual from this step forward. Proper installation is the key to prevent someone pulling the unit out of the wall when all they wanted was a few sheets of toilet paper.