A Paleta or Paleta Helada is pretty much like a Popsicle (US) or an Ice Lolly (UK). The difference is that a traditional Mexican Paleta is made with real fresh fruit juice, and sometimes chunks of real fruit in it.While the history of ice cream is well known (probably originated in China, passed to the Middle East and brought to Europe by Marco Polo), the history of Paletas is not very well recorded, even less so in Mexico.
There is an old legend that says that the Aztec emperors had people who would bring ice from the Popocatépetl volcano and that they would eat it mixed with fruits, but none of this actually comes from a reliable written source. What we know is that during the Viceregal times, ice was regulated and monopolized by the Spanish crown, making people pay very high taxes to have access to it.
After Mexico became independent from Spain in 1810, this taxation was lifted, and there was a democratization of the ice market. More people had access to it and therefore, more people experimented with it. One of the most famous heladerías is La Michoacana, a family business that started in Tocumbo, Michoacán in the 1940s, and that popularized paletas all over Mexico.
To give you a better description, paletas are usually a rectangular frozen treat, traversed with a wood stick used as a handle. They generally measure 6 x 14 x 2 cm and they can be milk or water based.

The flavors vary widely: from the typical chocolate or vanilla, to watermelon, lime, mamey, guanábana, mango, coconut, rum with raisins, pineapple with chili powder, cucumber with chili powder, pecan, pistachio, tamarind, etc. Sometimes they are covered with chocolate or nuts, and sometimes they have layers of different flavors.

My all time favorites are the Mango with chili powder paleta,

and the Paleta de Pie de Limón, which I translate as the Key Lime Pie Popsicle.
The latter is just like having a key lime on a stick. Not very traditional, but it is sooo good! This paleta can only be found at a paletería in downtown Coyoacán. If you ever go to this picturesque part of Mexico City, please don't miss this paletería with no name in Ignacio Allende street, right between the Farmacia Coyoacán and the Burger King.
And you? Which one is your favorite?
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