The term CITY FOUNDED BY PIZARRO is answered by the crossword solutions LIMA (4 letters) and U (1 letter). LIMA is the capital of Peru and was founded in 1535 by Spanish conquistador Francisco Pizarro. The city was named after the river LIMA, which was named by the indigenous people of the area. The letter U is likely referring to the Spanish word 'UNO, ' meaning one, as LIMA was the first city founded by Pizarro in South America.