Hi Karri!
"Gay" was used here in the USA long ago as well - weren't the 1890s called "The Gay 90's"??
Maybe it was some other decade from long ago.
Can you tell us what source you're referencing? Maybe they really are talking about the Madrid neighborhood of Chueca which MAY be called, by some, "Gay Madrid". For example, you still hear Paris, France as being called "Gay Paris" or "Paris" as it's pronounced in French, like "Gay Paree". So, they're most likely referring Madrid as "Lively" or even "Spirited". And while not positive, I believe the British have used this adjective much later than the USA in the "Lively" or "Spritied" meaning. And since most Spanish in Spain is translated using British English then that may be the reason.
Hope that helps. Saludos, MadridMan
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