Generally speaking, the best months for traveling in Nicaragua [1]—when the land is still green from the rains and the days are sunny and dry—are December, January, and February.
June, July, and August are nice as well, with cooler temperatures, fewer North Americans, and more European travelers. March, April, and May are the hottest, driest months, prone to pervasive dust and smoke caused by agricultural burning; September–November are the wettest months, and also hurricane season, when you can expect periodic tropical depressions to raise the rivers.
Nicaragua’s invierno (winter, or rainy season) lasts approximately May–October, and verano (summer, or dry season) lasts November–April. Rain during these months may mean just a quick shower each afternoon, or it may go on for days.
As you travel east toward the Atlantic coast or down the Río San Juan [2], the rainy season grows longer and wetter; in these areas, the dry season sometimes lasts only a month or two (around April).
Several fiestas are worth planning your trip around: the fiestas in Diriamba [3] around January 19, the Palo de Mayo on the Atlantic coast (throughout May), the Crab Soup Festival on Corn Island (August 27–28), and the Fiesta del Toro Venado in Masaya [4] (last Sunday of October). The first weeks of December, when Nicaraguans celebrate the Immaculate Conception with various purísima and gritería parades, are particularly lively in Granada [5] and León [6].
Links:
[1] http://www.moon.com/destinations/nicaragua
[2] http://www.moon.com/destinations/nicaragua/rio-san-juan/down-the-rio-san-juan
[3] http://www.moon.com/destinations/nicaragua/masaya/the-pueblos-blancos-and-carazo/carazo
[4] http://www.moon.com/destinations/nicaragua/masaya/masaya-city
[5] http://www.moon.com/destinations/nicaragua/granada
[6] http://www.moon.com/destinations/nicaragua/northwest-coast/leon