This mural is on the north wall of the Palacio Nacional and is separate from the mural seen in the stairwell to the second floor. This scene shows the built up city of Tenochtitlán which was founded on an island in Lake Texcoco.
Much like the Great Salt Lake in Utah, Lake Texcoco is located in a basin that had no natural outlet to the ocean. Therefore the water became brackish over time as minerals were left behind as water would evaporate from the lake.
Since Tenochtitlán was founded on an island in this brackish lake, the people needed a source of freshwater. To solve this problem, a 7 to 10 mile-long (12-16km) dike was created which collected the fresh water flowing in from the west and kept the salt water on the eastern side of the lake. The dike is thought to have been completed around 1450 AD.
The city itself had three long roads that stretched to the north, south and west, as the island was situated in the western portion of the lake. These roads had bridges which allowed for water traffic to pass beneath them and could also be pulled up in case of attack.
In the foreground is a market scene. The person seated in white with what appears to be a feathered fan is probably a market judge. The role of this person was to fairly settle disputes within the market. All decisions made by the judge were said to be final.