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Origins and early growth: Madrid is in the center of Spain, on the Castilian meseta or plain. It was settled by Moors in 852 AD, who built a fortress or alcazar to protect Toledo and other Muslim-occupied territories against Christian forces from the north. They reputedly chose the location because of a stream (the Manzanares) that offered a plentiful water supply, and the city's current name of "Madrid" may have derived from an Arab word for "stream" or "source of water."
More than two centuries later, in 1085, Madrid fell into Christian hands, and it remained a small settlement until Philip II moved his court to Madrid and made the small city his capital in 1561. Madrid's population grew from some 20,000 to more than 150,00 over the next century, and the city became the hub of a powerful and far-flung empire. Spain had its ups and downs in subsequent centuries, but Madrid continued to grow, and you still can see remnants of earlier dynasties and construction projects such as the City Hall (1630; see inset photo), the Plaza Mayor (1590-1790), and the present-day Royal Palace (1764), which was built after the old and much-expanded Moorish fortress burned down in 1734.
Modern Madrid: Fast-forwarding through the Bourbon, French, Republican, Nationalist, and other historic periods brings us to the present day, when most of the city that you see was built in the 19th and 20th Centuries. Along the Gran Via, for example, you'll view flamboyant wedding-cake skyscrapers from the early 1900s, leading to the Plaza de Espana with its massive, ornately decorated concrete skyscrapers from the late 1940s and '50s.
Head north from the center, along the leafy but heavily-trafficked Paseo de la Castellana, and you'll encounter wildly modern buildings such as the Torres Kio (left) at the Plaza de Castilla and Terminal 4 at Madrid's Barajas Airport, which was designed by the Richard Rogers Partnership and Estudio Lamala of Madrid. The newest precincts of Madrid may not be interesting to the average tourist, but they're in keeping with the spirit of a dynamic, growing city that has always been more inclined to look forward than to the past.