The town takes its name from the thermal spring much appreciated by Queen Dona Leonor, wife of the 15th century King Dom JoãoII, who had the opportunity to confirm the medicinal properties of this water when she cured her of a wound that had not healed for a long time, although she had tried several treatments. Since the water was in great demand at the time for the locals, who bathed in it to cure their ailments, the Queen ordered that a hospital be built so that they could treat themselves in some comfort. A village grew up around the hospital, which came to be known as "Caldas da Rainha" (Thermal Baths of the Queen). The city continued to grow and reached its heyday in the late 19th and early 20th centuries,
Also during World War II, the city was chosen as a refuge by many foreigners fleeing Nazi persecution.
Caldas was the birthplace of important figures in Portuguese culture, most notably the painter José Malhoa (c.19), whose work can be admired in the museum named after him in the Thermal Park (Dom Carlos I Garden); this is also where Rafael Bordalo Pinheiro was born, the 19th-century caricaturist, who founded the pottery factories of Caldas da Rainha, where the popular Caldas pottery was manufactured.
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