Thousands of sheep and goats thronged the streets of the Spanish capital on Sunday, drawing large crowds of tourists and locals alike to watch an annual festival recreating the pastoral practice of moving livestock to new grazing grounds.

Madrid sits on an ancient migration route that has always been part of a vast grid of farming paths covering the Iberian Peninsula. Open fields and woodland crisscrossed by droving routes once covered the area where the city now stands.

This year, the Transhumance Festival took a detour from its traditional historical route to avoid the city’s central square, the Puerta del Sol, where housing activists have set up a protest camp.

The housing protests gathered pace last month, fueled by outrage over the eviction of an 87-year-old woman from her home of seven decades in downtown Madrid.…