At first glance, the origin of the name Canillas de Aceituno would appear to be the expression Canilla de Azzeitun, meaning olive grove. However, it has been discovered that this is not the case, and that the town’s name is not related to the olive at all. In Arabic times, Canillas was famous for its natural silk, which was subsequently woven and dyed, known as azeytunî. The silk in question was particularly appreciated in the Albaycîn district of Granada. As a result, the area in which the present-day town now stands was home to a large number of mulberry trees whose leaves were used to feed the worms that produced this silk, even after the reconquest had taken place. The Casa de los Diezmos, where taxes were levied on the production and distribution of azeytunî, still stands in the centre of the town today, though it is now better known as the Casa de la Reina Mora, a reference to the fact that it was probably used as a summer residence by an Arabic princess.

However, it was not until 1569, a key date in the rebellion of the Moorish converts or Moriscos, that Canillas was recognised as a significant settlement within the estate of the Marquis of Comares.

The most significant event of these times was the assault on Pedro Mellado’s inn led by Andrês el Xorairán, who was born in Sedella. This invoked the fury of the Vêlez-Málaga legal authorities, leading to the random capture and torture of eight Moriscos, one of whom was the alderman of Canillas de Aceituno itself. This injustice led to a rebel response in the form of the battle of El Peñón de Frigiliana. In retribution, Canillas was destroyed, its inhabitants banished and its castle razed to the ground on the orders of Felipe 2nd in 1571.

The centre of the town is brimming with Mudêjar relics that were respected even after the return of Christianity. At the junction of Calle Agua and Calle San Antonio stands a Moorish arch which spans the whole width of the street. The same architectural feature is to be found in Calle Calleja and, overlooking the whole of the town, in the mansion built on the site of the former Arabic castle of Canillas Sazeytuno, whose foundations still remain. King Felipe IInd ordered the fortress to be demolished piece by piece to avoid further bands of Moriscos settling here, something which occurred during the Bentomiz Rebellion (1569-1570) which, according to the historian Josê Luis Jimênez Muñoz, originated in and was masterminded from Canillas itself.

Though the local economy was originally based on silk and vine production, both activities subsequently went into calamitous decline, the silk industry in the wake of the Christian reconquest and vine cultivation, which had actually thrived under Christian rule, as a result of the phylloxera plague. Nevertheless, the present-day town is home to one of the few wine cellars still in operation in the Axarquîa region. The current economy is based on agriculture in the form of the export of avocadoes and on hand-crafted products, specifically carpentry and the production of furniture and clothes.

The population of Canillas is largely distributed among the town itself and the neighbouring boroughs of La Huerta, Los González, El Tajo, Portugalejo, Los Ruîces, Posada del Granadillo, Los Capitos, Loma de las Chozas and part of Rubite. The town is also home to a number of places of great interest, such as La Rahige, next to the River Almanchares, La Rábita, La Fájala and El Saltillo.