Colonization to Independence

In 1536, the Viceroyalty of New Spain was established. By 1570, the southern part of New Spain was designated the Captaincy General of Guatemala. The area of Nicaragua was divided into administrative "parties" with León as the capital. In 1610, the Momotombo volcano erupted, destroying the capital. It was rebuilt northwest of what is now known as the Ruins of Old León.

Nicaragua became a part of the Mexican Empire and then gained its independence as a part of the United Provinces of Central America in 1821 and as an independent republic in its own right in 1838. The strip of the Caribbean coast known as the Mosquito Coast was claimed by the United Kingdom and its predecessors as a protectorate from 1655 to 1850; this was delegated to Honduras in 1859 and transferred to Nicaragua in 1860, though it remained autonomous until 1894. José Santos Zelaya, president of Nicaragua from 1893–1909, managed to negotiate for the annexation of this region to the rest of Nicaragua. In his honour the entire region was named Zelaya.
Founding members of the Deutsche Club in Nicaragua.

Much of Nicaragua's independence was characterized by rivalry between the liberal elite of León and the conservative elite of Granada. The rivalry often degenerated into civil war, particularly during the 1840s and 1850s. Initially invited by the Liberals in 1855 to join their struggle against the Conservatives, a United States adventurer named William Walker (later executed in Honduras) set himself up as president of Nicaragua, after conducting a farcical election in 1856. Costa Rica, Honduras and other Central American countries united to drive him out of Nicaragua in 1857, after which a period of three decades of Conservative rule ensued.[30]

In the 19th century Nicaragua experienced a wave of immigration, primarily from Europe. In particular, families from Germany, Italy, Spain, France and Belgium moved to Nicaragua to set up businesses with money they brought from Europe. They established many agricultural businesses such as coffee and sugar cane plantations, and also newspapers, hotels and banks.

Throughout the late 19th century the United States (and several European powers) considered a scheme to build a canal across Nicaragua linking the Pacific Ocean to the Atlantic. A bill was put before the U.S. Congress in 1899 to build the canal, but it was not passed, and instead the construction of the Panama Canal began.

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