Panaji (formerly Panjim) is the capital of Goa, a small and manageable town overlooked by the Altinho hill to the south. It lacks the grand monuments of Old Goa a few kilometres upriver, but has a relaxed charm of its own — particularly in the old Latin Quarter of Fontainhas, where narrow lanes wind between colourful Portuguese-era houses with tiled roofs and wrought-iron balconies.
Fontainhas is the nicest part of town for a stroll. When you are done wandering, climb the Altinho for views over the Mandovi estuary. The seafront boulevard runs south for three kilometres and makes for a pleasant evening walk. Good beaches are close by — Miramar is the nearest, though the beaches further south or north along the coast are better for swimming.