The modern Castilian region of Spain.
What many don’t realize without studying the Hispanic cultures and languages is that Spanish, like English, has a multitude of dialects that change across distances and borders both in Spain itself as well as the vast region of South America. In Spain, the nation of origin for Spanish (or Español), there exist two primary dialects/accents of Spanish: Castilian and Peninsular (also known as Iberian).
The biggest distinction between the two is the famous Castilian lisp-like pronunciation of certain sounds. For example, the Spanish word for “arm”, “brazo” would be pronounced “bratho” in Castilian, while Peninsular would pronounce it as “brasso”. This lisp is most noteworthy in the pronunciation of the letter “z”, which is obviously a “th” in Castilian, but is an “s” in Peninsular. This lisp-like pronunciation is really just considered a voiceless /th/ sound by accent reduction specialists.
This speech characteristic came about because at one point, a king in Castile, Spain, had damaged teeth, causing him to speak with a distinct lisp. Wishing to imitate and honor their king, the people of the region adopted this lisp into their normal speech patterns, where it has remained ever since.
Today, most Spanish speaking countries (especially in South and Central America) base their speech and pronunciation over the more widely-spoken Peninsular/Iberian form of Spanish. This is mainly a result of the time in which these lands were both discovered and settled, during the reigns of King Ferdinand and Queen Isabella, and the subsequent times thereafter, when Iberian was a national standard of language in most of Spain.
Some Spanish accent reduction and accent coaches have cited evidence of the Castilian lisp being present to low degrees in rural Peruvian and Nicaraguan dialects, but most orthography experts have deemed this to likely be more of a coincidence than anything else.
On the whole, pronunciation lessons and accent classes for Spanish outside of Spain clearly follow the Peninsular/Iberian pronunciation standards rather than the distinct Castilian lisp, which can be clearly heard in Mexican, Puerto Rican and Chilean dialects of Spanish above all other Central and South American dialects of the language.
A common mistake made by a casual observer, which leads to the link between Castilian Spanish and Central/South American Spanish is pointing out a similar lisp-like pronunciation in the accent of Brazilian speech. This is an error as Brazil actually speaks a dialect of Portuguese, which some linguistics experts believe may have been heavily influenced by Castilian Spanish during Castile’s era of political importance. This is again an unproven theory.
Ultimately, it is agreed by most Spanish language experts, the standard base dialect and mode of pronunciation for worldwide Spanish is in fact Peninsular/Iberian Spanish. It is also worth noting that many linguistics experts predict the gradual disappearance of Castilian and Basque Spanish dialects due to the gradual accent reduction being caused by mass media and instant communications which have come about in the last 40 years.
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