2. Pampaneira:
A sparsely populated village sitting pretty 1060 meters above sea level on a hilltop in Granada province is one of the three mountain villages in the Poqueira gorge in Alpujarras region. The lowest village in the gorge, Pampaneira is famous for its handwoven rugs and other crafts.
The town is lined with stores selling all sort of handicraft items including clothes, leather, and ceramics. Also famous in the village are the locally produced cheese and ham. Pampaneira is one of the most wonderful little towns you must visit in Spain.
A great list but I would also include some places in Extremadura!