What is the term "Mercedes" during Colonial Mexico?

I was chatting with someone who is from Hacienda San Mateo of Valparaiso, Zacatecas, Mexico and knows a lot of the history of "Conde Don Fernando De La Campa Y Cos"

We were talking about the Astillero. I told him my family was at "Rancho De Los Maderas" of Huejuquilla El Alto during Colonial Mexico.

He mentioned to me in spanish:

"Lo que ustedes representaron fue la clase de los rancheros.
La primera merced de tierras que les dieron a los Madera fue en el rancho de Palmitos en 1697-98.
La merced se les ratificó en 1758."

I am not familiar with Rancho de Palmitos (I might have come across that name when I browsed through archives).

But there are three Rancho Maderas near Huejuquilla El Alto. And when I was research my family tree, found that my Paternal great great great grandfather Juan Venancio Madera, "Espanol" was born in Rancho De Los Maderas (Rincon De Los Maderas) aproximelty in the 1760's since I can't remember the exact date.