Nicaragua had been part of the audiencia…

Nicaragua had been part of the audiencia (audience or court) of Panama, established in 1538, but it is transferred to the Viceroyalty of New Spain when Spain divides its empire into two viceroyalties in 1543.

The following year, the new audiencia of Guatemala, a subdivision of the Viceroyalty of New Spain, is created.

This audiencia extends from southern Mexico through Panama and has its capital first at Gracias, Honduras, and then at Antigua, Guatemala, after 1549.

In 1570, the audiencia is reorganized and reduced in size, losing the territory of present-day Panama, the Yucatan, and the Mexican state of Tabasco.