Sacromonte is traditionally Granada's Gitano quarter, and these days, it is the epicenter of the city's flamenco scene. Spilling down the sides of its hill (the 'sacred mountain' of the same name; the district is actually named after the Sacromonte Abbey), the area has been extensively commercialized, but still has plenty of magic. At dusk, with the lights twinkling and the Alhambra views, it's hard to resist.
It was in the 19th century that Sacromonte became the province of the Gitano. The local rock has enough clay to be soft, but enough rock to be stable when formed. Hence, many of the poorer people shaped caves into the sides of Sacromonte and lived in those. The community, and flamenco, thrived. During the 1960s floods rendered many of the caves uninhabitable, and many of the locals evacuated.
Today, the area has revived as a center of Gitano culture, and many of the caves are now used as flamenco theaters and even hotels. If you're seeing a performance, come early to walk around the district. Climb the hill to the Abbey and you'll be rewarded with fine sunset views.