Elevation ranges from roughly 800 meters at the town square to 2,870 meters at the peak of Montaña Celaque (also known as Cerro Las Minas). Climate is greatly influenced by elevation, with the low-lying portions having a wet-dry (monsoonal) pattern. Montaña Celaque is the highest mountain and largest cloud forest in Honduras, and is protected through Celaque Mountain National Park.
The word gracias means "thanks" in Spanish. It is said that upon arriving at the site of the city of Gracias, the Spanish explorers, tired after having trekked through the mountainous terrain, said "Gracias a Dios hemos llegado a tierra plana," meaning "Thank God we have arrived at flat land."
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