Capitan seems to have gotten most of its' fame from a small bear cub that was rescued from a blazing forest fire in the Capitan Mountains area of Lincoln National Forest back in the early 1950's. When firefighters found the cub, it couldn't walk because its feet were badly burned. They transported the bear away from the fire and nursed it back to health. Then they named it "Smokey Bear" and a world-recognized anti-forest-fire icon came into being. Smokey was later transported to the National Zoo in Washington, DC. He lived there for 26 years before passing away. When Smokey died, his body was brought back to Capitan and buried on the grounds of the Smokey Bear Historical Park.
When you drive through Capitan you'll see that so much of the town's business revolves around that former bear cub and his relatives... which is kinda funny because this is big cattle and horse country, has been since the Europeans first arrived. This area is also the former stomping grounds of Billy the Kid...
Fort Stanton (south of Capitan) was built to garrison soldiers to keep the Mescalero Apaches on their reservation. The Lincoln County War was about which particular local cattle rancher was going to supply beef to the Fort (it was a very lucrative contract). It was the Lincoln County War that led to the fame of Billy the Kid. And Capitan is on the Billy the Kid Scenic Byway (as is Carrizozo, which didn't exist during Billy's short life). Of course, Billy was shot and killed by Pat Garrett over in Fort Sumner (which town seems to get half its' fame from being the place where Billy was shot, killed and buried, and the other half of its fame comes from the Long March of the Navajos when they were exiled to nearby Bosque Redondo in the 1860's).