Granada gränä´ᵺä [key], city (1995 pop. 74,396), W Nicaragua, on Lake Nicaragua. It is Nicaragua's third largest city and the center of commerce on Lake Nicaragua. Located in a rich agricultural region, Granada has been the stronghold of Nicaragua's landed aristocracy; manufactures include furniture, soap, and clothing. Granada was founded in 1524 by Francisco Fernández de Córdoba. In the 17th cent., it was the object of repeated raids by French and English pirates. After independence from Spain (1821), Granada became the conservative center, engaging in bloody rivalry with León, the city of the liberals. The struggle led to the capital's transfer to Managua (1855). Granada was captured (1855) by the filibuster William Walker.
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