It’s Santiago [Sant’Iago] de Compostela ( hence the city of Santiago in Chile, and any number of Spanish-speaking men baptised by that name) and yes, ‘Santiago Matamoros’ was and is one of his titles and guises.
And no, it’s actually not at all extraordinary that the town’s name has only now been changed. It’s perfectly true that there is still entrenched anti-Semitism in Spain, and I’d go so far as to say that being ‘the pure Christian nation that threw out the Jews and the Moors’ is such an entrenched and treasured part of the Spanish identity that it’s not easy for the Spanish to divest themselves of it.
Here’s an example: a year ago I was in Zaragoza, the historic capital of Aragon, and visited the Cathedral, an 8th-century mosque inside a Romanesque cathedral with Gothic additions and a series of Renaissance-through Baroque chapels, which is rightly a World Heritage Site. I was checking out the chapels one by one when I was rocked right back on my heels to find that one of them not only was but still is dedicated to San Dominguito de Val, whose vile blood-libel legend was narrated on the World Heritage signage in half-a-dozen languages as fact, without so much as an ‘according to legend’ or ‘was said to be’, but with the cheery detail that he is still considered to be the patron saint of Zaragozan choir- and altar-boys, who participate in an annual service on his feast day. (What the signage didn’t say was that the Roman Catholic Church has disowned the legend of Saint Dominguito and dropped him from the official liturgical calendar – but the Zaragozans evidently don’t want to give him up, and are ignoring that.) After that, to find that the next chapel but two was dedicated to San Pedro de Arbues, the High Inquisitor of Zaragoza, was a mere bagatelle.
In the light of this, I think it was a trifle grudging of the anonymous ‘Jewish American who has lived in Spain’ to say ‘it’s pretty disgusting that it’s taken them till now to think it might be a good idea to change it’. The mayor’s remarks clearly imply that he and other people had been thinking of it for some time, but had reckoned – and I’m sure they were right – that it would be counter-productive to put it to a vote until, they could be sure that enough of the populace would vote yes. Things are changing in Spain, but they started not that long ago from an appallingly obscurantist and bigoted past.