Nicaragua is the third least densely populated nation in Central America, with a demographic similar in size to its smaller neighbors. It is located about midway between Mexico and Colombia, bordered by Honduras to the north and Costa Rica to the south. Nicaragua ranges from the Caribbean Sea on the nation's east coast, and the Pacific Ocean bordering the west. Nicaragua also possesses a series of islands and cays located in the Caribbean Sea.

Nicaragua's name is derived from Nicarao, the name of the Nahuatl-speaking tribe which inhabited the shores of Lake Nicaragua before the Spanish conquest of the Americas, and the Spanish word 'Agua', meaning water, due to the presence of the large Lake Cocibolca (or Lake Nicaragua) and Lake Managua (or Lake Xolotlán), as well as lagoons and rivers in the region.