Nicoya’s name is derived from the name of the chief of the Chorotega Indians, who inhabited the area during the 1500s. When Spanish explorer Gil Gonzalez Davila led an expedition to the settlement, Chief Nicoa welcomed Davila and his men, who later thanked their host by naming their discovery after him. About 20 years after Davila’s visit, Spanish Catholic missionaries founded the Iglesia de San Blas , one of the oldest churches on Costa Rica.

For the next 250 years, Nicoya was the dominion of Spain. The town’s main source of income was coffee and banana exports, and most Nicoyans were involved in agricultural production. In 1821, Costa Rica declared independence from Spain, but at that time, Nicoya was part of Nicaragua, another newly independent Central American state. A few years later, Costa Rica annexed Nicoya as part of the province of Guanacaste.

Costa Rican democracy is built upon the legacy of José Figueres Ferrer, a national hero who pushed for a new constitution and fairer elections. Once elected leader, he disbanded Costa Rica’s army and ushered in an era of peaceful democracy that has lasted until today. Nicoya has benefited from Costa Rica's political stability, for it has enabled the city to establish itself and its beaches as a premier international tourist spot.