Folkloric legends recorded in the Maragtas by Pedro Monteclaro says ten Bornean datus landed at a site now known as San Joaquin town in Iloilo province. They purchased Panay from the Ati, cultivated the land, and renamed the island Madya-as. They divided it into three communities: Irong-irong, Akean (which includes the Capiz area), and Hamtik.
Capiz, which was part of Aklan in pre-Spanish times, was one of the early settlements of the Malayas, centuries before the coming of the Spaniards to the Philippines. It was part of the Confederation of Madjaas, formed after the purchase of Panay by the Bornean datus from the Negrito king named Marikudo.
When the Spaniards led by Miguel López de Legazpi came to Panay from Cebu in 1569, they found people with tattoos, and so they called it Isla de los Pintados. How the island itself came to be called Panay is uncertain. The Aeta called it Aninipay, after a plant that abounded in the island. Legend has it that Legazpi and his men, in search of food, exclaimed upon the island, Pan hay en esta isla!. So they established their first settlement in the island at the mouth of the Banica River in Capiz and called it Pan-ay. This was the second Spanish settlement in the Philippines, after San Miguel, Cebu.
Panay received its present name from Spanish officials who named the island after one of its earliest settlements, the town of Pan-ay in the province of Capiz. It was, however, once referred as Aninipay by the indigenous aeatas and later Madia-as by the Malay settlers who first arrived in the island in the 12th century.