Villarrica del Espíritu Santo (Spanish pronunciation: [ˌbiʎaˈrika ðel esˈpiɾitu ˈsanto]), is a city in Paraguay.

Nevertheless, the original foundation site was located within the extinct Spanish province of Guayra in what is now the state of Parana in Brazil.

These relocations were mainly caused by the repeated attacks from the neighbouring portuguese bandeirantes but also by political and economical issues.

Meanwhile, the Spanish in Asuncion decided to settle more towns to the east closer to the Portuguese border to reinforce their territorial claims.

In 1557, Ruy Diaz Melgarejo founded another city in Guayrá named Ciudad Real with the purpose of reducing the abuse that the Portuguese were inflicting on the Cario Indigenous tribe but also due to the strategic location as a trail towards Brazil.

When Riquelme arrives in Ciudad Real, Melgarejo has him arrested, incarcerated and later banished to a cabin forty leagues away of the town.

In the 16th century, Melgarejo departs from Ciudad Real with 40 men and 53 horses towards the East where he expected to find mines of gold and silver.

After arriving in the lands of Indian chief named Cuaracybera (Shining-Sun), he settles a new town on May 14, 1570, and names it Villa Rica del Espíritu Santo (Wealthy village of the Holy Ghost) because of the belief that there were precious metals in the area and because the date was near the Catholic festivity of the Holy Ghost.

On the other side of the river, they found fertile land and several streams near the Ybytyruzú hills so they requested the Spanish Governor's authorization to move the city again.

The Franciscan missionaries helped the town's stabilization, founding the Guaraní Mission of Itapé The Franciscan friars in an effort of educating the population and gaining souls to the Catholic faith ran a convent that worked as an elementary and secondary school from the 1600s until 1818 when Gaspar de Francia the dictator of Paraguay had it shut as part of his policy of retaining absolute control over the country.

From 1892 to the beginning of the 1900s, the city received an important influx of Italians, French, Spaniards, Germans, Ashkenazi Jews, Argentines, Uruguayans and a lesser number of Lebanese, Croats and Greeks.

These immigrants helped develop the industry, the culture and the education making Villarrica the second most important city after the capital, Asuncion.

By the end of the 20th century Villarrica had lost its prominent position within the country to newer settlements like Ciudad del Este, Encarnacion and Luque.

Due to the heavy deforestation, one can observe primitive tree species almost exclusively in areas of difficult access such as banks of streams.

The Bolas Cuá stream, initially runs to the southwest where it serves as the border between Villarrica and San Salvador.

The influx of European immigrants the city received in the late 19th century constituted a significant part of the ethnic make up of Villarrica until the second Paraguayan Civil War in 1947.

After this conflict the number of European-descended people started to shrink rapidlly due to emigration to Asuncion and Argentina, decreasing birth rates among the Europeans, increasing birth-rates of the locals and mixed-unions with the already majoritary population with significant Indigenous and Sub-Saharian African ancestry.

By the end of the 20th century the racial make up of Villarrica was virtually identical to the one of Paraguay having over 90% of racially-mixed residents who prefer to speak Jopara and Guarani over plain Spanish.

The most important economic activities of Villarrica are commerce of Brazilian and Argentine goods, services and family-owned industries like sugar processing, furniture making and shoemaking.

Some cooperative institutions are COOPEDUC (founded in Villarrica), COOMECIPAR (nation-wide health personnel) and Cooperativa Universitaria.

Villarrica used to be regarded as the second most important city in Paraguay due to the dynamic cultural activity it had until the first half of the 20th century.

Many renowned Paraguayan artists such as poet Manuel Ortiz Guerrero, classical composer Diego Sanchez Haase and guitar player Cayo Sila Godoy were born and raised there.

In addition, many towns in Paraguay such as Caaguazu, Mbocayaty, Independencia and even Union in San Pedro Department are said to have been settled by pioneers and families from Villarrica.

In 1992, the Asociacion Filarmonica Guaireña gives classes of violin, viola, cello, bass, flute and musical theory.

It is also a good place to observe and feed animals like capybaras, ducks, mallards, cormorants, geese and an endangered species of rodent called agouti.

It keeps personal belongings of Paraguayan War heroes like Fermín López and poet Natalicio Talavera; arms and ammunitions from the Chaco War, a collection of old Paraguayan coins and bills, as well as other artifacts such as indigenous weapons, old furniture, old photographs of the city and pieces of religious art.