from Wikipedia Managua:
Managua is the capital city of Nicaragua as well as the department and municipality by the same name. It is also the largest city in Nicaragua. It is located on the southwestern shore of Lake Managua. The city was declared the national capital in 1852. Previously, the capital had alternated between the cities of León and Granada. The city has a population of about 1,680,100; composed predominantly of Spanish-speaking criollos (unmixed Europeans), whites and mestizos.
Founded in 1819 and given the name of Leal Villa de Santiago de Managua, its original purpose was to serve as a rural fishing village. Efforts to make Managua the capital of Nicaragua began in 1824, after the Central American nations became independent from Spain. Managua's location between the rival cities of León and Granada made it an ideal compromise site.
The city has been witness to the rise and fall of political powers throughout Nicaragua's history, and has suffered two devastating earthquakes over the course of the 20th century. Managua is the economic, political, cultural, commercial and industrial center of Nicaragua.
In 2007, after a successful literacy campaign, Managua was declared the first capital city in Central America to be rid of illiteracy.