'Ceceo' refers to the convention in Castillian Spanish and a few other dialects to pronounce the letters 'z' (in all cases) and 'c' (before 'i' or 'e') as a voiceless interdental fricative or /θ/, which is basically the 'th' sound in English 'thin'. This is as opposed to the /s/ sound which they represent in most dialects. Some may refer to this as a 'prestige lisp', but it's just an older form that has since been developed out of newer dialects, which mostly derive from Andalucian Spanish. Apparently, at the time of Columbus the 'z' and 'c' were pronounced dental /s/, and 's' was pronounced alveo-palatal /š/ (like 'sh' in English) or /z/. Southern Spaniards (most of the ones who settled in the Americas) began to confuse the two sounds, both becoming a dental /s/. Later development in Spain rendered the /s/ into /θ/ and /š/ and /z/ into an alveolar or near alveo-palatal /s/.

A person or dialect with ceceo is described as ceceante (the opposite is seseante). Due to the ceceo, a distinction is made between cierra/sierra, casa/caza and cocer/coser. This can, of course be very handy in avoiding confusion. There is a bit of prestige attached to it, but it's really just like how pronunciations of English can differ from Britain to America to Australia. An interesting point is that if you speak to a British person in Spanish, chances are he or she has a ceceo becuas ethe standard learned over there is the Castillian dialect, whereas in America the standard Latin American dialect is taught.

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