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Taken from here: https://en.wikipedia.org/wiki/F%C3%A1tima,_Portugal
The name of the town and parish is a rendition of the Arabic given name Fátima (فاطمة Fāṭimah). (Fatimah is the namesake of Fatimah bint Muhammad, a daughter of the prophet of Islam Muhammad.)
Fátima was said to be the name of a Moorish princess kidnapped by a knight, Gonçalo Hermigues, and his companions. Hermigues took her to a small village in the Serra de Aire hills, in the recently created Kingdom of Portugal. According to the Western Catholic narrative, Fatima fell in love with her kidnapper and decided to convert to Christianity in order to marry him. She was baptized and given a Christian name, Oureana.
Arab sources, however, claim that Fátima was forced into Christianity, as were most Reconquista captives. There is no documentary evidence to support either scenario of such a conversion.