an Indian lady was carrying her deaf mute child nearby and suddenly the child saw a beautiful "metzisa" lady and told her mom about it. Soon locals were visiting it as a shrine, and it does date back that far, because a Spanish friar mentions it's presence in one of his diaries.
They were walking on a path halfway up a deep gorge, so the shrine is built on that level.
It is a big pilgrimage site for Colombianos and Ecuadorians (it is near the border). It is quite impressive. We approached it from the Colombian side, hiking through fields on a dirt road and then going across the bridge, but most of the Pilgrims arrive on the side of the church, where the walk way is larger.
And yes, many climb to the stream below to bathe etc. I didn't go down: the area is high in altitude and I didn't think I could climb back up.
Like many many similar shrines, locals believed in the vision and made a shrine there: it was not a Spanish conspiracy to make people believe, as is the usual cynical take on such shrines (and there are many). Like Guadalupe, the point was that the Virgin was not "European" but looked like a local lady, and she appeared to the poorest of the poor... and helped her.
wikipedia page here
local webpage HERE. with lots of Spanish language links.