The top is in fact from the 1920's: Illuminated Top, US Patent no. 1,503,006, issued July 19, 1924, to Paul J. Rause from South Orange, New Jersey.
Personally, I was surprised that batteries were common enough at that time for use in toys. So I did a little research on the internet and found that the first commercial flashlight came out in 1899, using the dry cell battery first mass produced in 1896. After the replacement of the carbon filament with tungsten a few years later, they became quite popular and by the 1920's they were common. So the top could have been invented even earlier.
One of the claims disclosed in the patent is the switch that turns on the light only when the top is spinning. The peg over which the top spins is the switch: when the top is lying down on the side a spring pushes the peg out, but when it bears the weight of the top it goes in and closes the circuit.
I hope I don't burn the 90-year old bulb when I try to power it ...