More settlers began arriving to this Spanish colony, and eventually Camino Real (or royal road), the first trail across Panama's isthmus, was established. Spain soon began using this shortened route as an alternative to the time-consuming and dangerous sea-voyage around the tip of South America.

1 - Bocas Del Toro Province	6 - Herrera Province Map
2 - Chiriquí Province Map	7 - Los Santos Province Map
3 - Coclé Province Map	8 - Panamá Province Map
4 - Colon Province Map	9 - San Blas Province Map
5 - Darién Province Map	10 - Veraguas Province Map

Importance

The Spanish conqueror Pizarro used Panama as a base from which to launch his invasion and conquest of the Inca Empire. He and his men shipped the booty to Panama City, then carried it overland to the Caribbean, where it was shipped to Spain.

This established a trading route that would change the history of Panama for more than a century, until piracy in the Caribbean made shipping so dangerous that ships took the long route around South America to get to the Atlantic. Panama itself was also a target of pirate attacks since it was a temporary storehouse for so much wealth.

http://history.howstuffworks.com/central-american-history/history-of-panama.htm

http://panama-information.executivehotel-panama.com/in-panama-history.html

HiStOrY

Panama's history has been shaped by its strategic location between the Pacific Ocean and the Caribbean. The native Cuevas and Cocole tribes quickly disappeared after the Spanish arrived with their weapons and diseases in the early 16th century. Panama City, on the Pacific coast, thrived as Spain conquered and plundered Peru. Caravans loaded with gold traveled overland across the narrow isthmus from Panama City to be loaded on galleons bound for Spain. However, this wealth attracted pirates and, in the early 1700s, Panama's Caribbean shore was dotted with so many pirate strongholds that shippers chose instead to sail around Cape Horn to Peru. Panama's importance rapidly declined, and Spain did not contest its inclusion as a province of Colombia when that country won its independence from Spain in 1821.

http://www.worldbookonline.com/student/article?id=ar412380&st=panama&sc=5#h34