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The US military invaded twelve times, and occupied the country almost continuously from 1912 to 1933. But in 1927 the US had created a police organization called the National Guard, under leader Anastasio Somoza. From 1936 to 1979 various Somozas used their leadership of the Guard to make themselves president of Nicaragua. They were supported by the United States and supported the United States in international diplomacy. They ruled by means of the Guard, imprisoning or killing anyone who opposed them.
In 1979 the revolutionary Sandinista organization overthrew the dictatorship. Openly Marxist, prodemocratic, and anti-US, the Sandinista program called for free elections and the return to the people of wealth that Somoza and the National Guard had taken. US President Carter tried to force them to preserve the National Guard, but they refused. Apparently at least in 1980 and the first few months of 1981, the Sandinistas supplied weapons to the FMLN rebels fighting the US and its client regime in neighboring El Salvador. Using this as justification, the Reagan administration built a complete project to destroy the Sandinistas, financially cutting Nicaragua off from much of the world, creating a propaganda network to portray the Sandinistas as undemocratic, funding opposition parties and groups. In 1982 the US military began its buildup in nearby Honduras, which eventually became a fully-functioning war-support base for the "Contras," the CIA-led group of former National Guard members the US was using to try to overthrow the Nicaraguan government. Thousands of US troops ran the effort from Honduras, flew supply missions, and provided support. Contra members were shipped to the United States for training.
In 1984 the Sandinistas held the first free election in the history of Nicaragua and won easily. The Reagan administration persuaded the primary opposition leader to boycott the election because he would not have won; administration officials have since admitted that the goal of their policy was to portray Sandinistas as undemocratic. The election was overseen by a host of international observers, who pronounced the election fair, despite US propaganda. US-produced manuals outlining a host of terrorist techniques were discovered: the US-led contra war was an attack on hospitals, schools, water sources, and other civilian centers. Sexual torture was standard practice for the CIA-led Contra forces.
Nicaragua took the US to the World Court for its aggression. In 1986 the World Court found US guilty of "unlawful use of force" and ordered USG to pay damages to Nicaragua. The USG refused to accept the jurisdiction of the court, refused to pay its fines, and continued its war against the elected government. In 1990, with the economy destroyed, thousands dead, the Sandinistas held another internationally-supervised election and lost. By this time, however, many in the top leadership, especially the president, Ortega, had become corrupt and begun enriching themselves and their families. Ortega continued down this road, drifting farther to the right on social issues and making an alliance with formerly US-backed enemies. He came to be opposed by Sandinista leaders who retained their revolutionary goals. Still far too leftist for the US despite his rightward drift, he won the presidential elections of 2006 anyway, sixteen years after leaving office.
Source for some of this is William Blum's Killing Hope (Monroe, ME: Common Courage, 2004).