Nicaragua derives its name from that of the Amerindian chief Nicarao who once ruled the region. The first European contact came with Columbus in 1502. At that time the northern part of the country was inhabited by the Sumo Amerindians, the eastern region by the Miskitos, and the region around Lakes Nicaragua and Managua by agricultural tribes.
The first Spanish settlements in Nicaragua were founded by the conquistador Gil González de Ávila in 1522. The cities of Granada and León were founded in 1524 by Francisco Hernández de Córdoba. During the next 300 years—most of the colonial period—Nicaragua was ruled as part of the captaincy-general of Guatemala. The independence of the five provinces of Central America, including Nicaragua, was proclaimed on 15 September 1821. After a brief period under the Mexican empire of Augustín de Iturbide (1822–23), Nicaragua joined the United Provinces of Central America. Nicaragua declared its independence from the United Provinces on 30 April 1838, and a new constitution was adopted.
Nicaragua did not immediately consolidate as a nation. The Spanish had never entirely subdued Nicaragua, and the Mosquito Coast at the time of independence was an Amerindian and British enclave, especially around the Bluefields area. Britain occupied the Mosquito Coast during the 1820s and 1830s, and maintained a significant presence thereafter. Beyond that, Nicaragua was torn apart by a bitter struggle between liberals, based in León, and conservatives, based in Granada.
Yet another factor impeding Nicaragua’s development was constant foreign intervention focusing on the trade route through the country. Commodore Cornelius Vanderbilt competed with the British for control of the transisthmian traffic, a rivalry settled by the Clayton-Bulwer Treaty of 1850. In 1853, liberals led by Máximo Jérez and Francisco Castellón revolted and invited the US military adventurer William Walker to help their rebellion. Walker invaded Nicaragua in 1855, capturing Granada and suppressing Jérez, and had himself elected president in 1856. He lasted only one year, and was captured and executed in Honduras in 1860. Conservatives seized control in 1863 and ruled until 1893.
The 30-year conservative reign brought increases in coffee and banana production. Liberals successfully revolted in 1893, and José Santos Zelaya became president. Zelaya’s dictatorship lasted 16 years, during which he incorporated most of the Mosquito territory into Nicaragua, developed railroads and lake transportation, enlarged the coffee plantations, and stirred up revolts among his Central American neighbors. In 1901, by the Hay-Pauncefote Treaty, Great Britain gave the United States the undisputed right to build a Central American canal. Zelaya was finally deposed in 1909, after a conservative revolt.
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