Originally inhabited by various indigenous cultures since ancient times, the Spanish Empire conquered the region in the 16th century. Nicaragua gained independence from Spain in 1821. The Mosquito Coast followed a different historical path, with the English colonizing it in the 17th century and later coming under the British rule, as well as some minor Spanish interludes in the 19th century. It became an autonomous territory of Nicaragua in 1860 and the northernmost part of it was later transferred to Honduras in 1960. Since its independence, Nicaragua has undergone periods of political unrest, dictatorship, occupation and fiscal crisis, leading to the Nicaraguan Revolution of the 1960s and 1970s and the Contra War of the 1980s.
The mixture of cultural traditions has generated substantial diversity in folklore, cuisine, music, and literature, particularly the latter given the literary contributions of Nicaraguan poets and writers, such as Rubén Darío. Known as the "land of lakes and volcanoes", Nicaragua is also home to the second-largest rainforest of the Americas. The country has set a goal of 90% renewable energy by the year 2020. The biological diversity, warm tropical climate and active volcanoes make Nicaragua an increasingly popular tourist destination.
There are two prevailing theories on how the name "Nicaragua" came to be. The first is that the name was coined by Spanish colonists based on the name Nicarao, who was the chieftain or cacique of a powerful indigenous tribe encountered by the Spanish conquistadorGil González Dávila during his entry into southwestern Nicaragua in 1522. This theory holds that the name Nicaragua was formed from Nicarao and agua, which means "water" in Spanish, to reference the fact that there are two large lakes and several other bodies of water within the country. However, as of 2002, it was determined that the cacique's real name was Macuilmiquiztli, which meant "Five Deaths" in the Nahuatl language, rather than Nicarao.
The second theory is that the country's name comes from any of the following Nahuatl words: nic-anahuac, which meant "Anahuac reached this far", or "the Nahuas came this far", or "those who come from Anahuac came this far"; nican-nahua, which meant "here are the Nahuas"; or nic-atl-nahuac, which meant "here by the water" or "surrounded by water".