La plaza Mayor is the heart of Madrid.
Its location was right at the outskirt of the old city (Mayrit), when the Muslims ruled it. There was then damps, possibly a river. When the city expanded, it became a market and then the Plaza del Arrabal, which was a popular spot, both messy and unsanitary. Felipe II asked for its reform (in 1577). The construction started only under Felipe III's reign (in 1617). The Plaza Mayor as it s know it today dates from 1790, as modeled by the architect Juan de Villanueva.
Aerial view (credits unknown).