Also, how historically accurate is this show? I can imagine some is exaggerated.

Your question made me check this series, that I had never watched. Though I know next to nothing of Colombian history in this period, from what I've read in other people's comments is that the accuracy of the show to the events is, in general, low. I'm Spanish, however, and I can tell you one thing: everything regarding "The Spaniard" in episode 1x06 is between silly and ridiculous. I don't remember the particular line you ask about, so I'd like to ask if you remember what particular episode it is in. Anyway...

Spain is, for geographical reasons, one of the main gateways of drugs to Europe. African drugs (mostly hashish) are smuggled in inflatable boats from Morocco over the Straits of Gibraltar, while South American cartels prefer to ship them to Galicia in the northwest of the country.

Galicia is a good choice to South American dealers for a number of reasons. There are cultural and language affinities (before anyone gets too smart, let me say the vast majority of Galicians are bilingual Galician/Spanish, and Galician is largely intelligible with Spanish anyway), family connections that can be exploited (Galicia was such a large source of emigration to South America and the Caribbean from the late 19th to mid 20th centuries that "Galician" is used as slang for "Spaniard" all over Latin America, and many families in Cuba, Venezuela and Colombia keep in touch with their relatives in Galicia and viceversa) and in the 80s, with Spain joining the EEC in 1986, there was a large reconversion of the traditional Galician fishing and shipbuilding industries to meet European mandated standards, leaving a lot of people who knew about the local sea conditions out of work. In addition, the western coast of Galicia (the Rías Baixas) is incredibly rugged, the climate is very humid, rainy and foggy, and it is right next to Portuguese territoral waters. All of these factors "conspired" to make W/SW Galicia perfect for smuggling.

So, when South American narcos began arriving in Galicia in the 1980s, they simply made business with local Galician seamen/part time smugglers that had been dodging coastguards all the way back to the 1950s or earlier to smuggle tobacco from Portugal. The narcos would ship large ammounts of drugs up to a prudential distance for the coast, then the Galicians would use small boats to smuggle the drugs to land at night, dodging coastguards thanks to their detailed knowledge of local geography and tides. This wasn't a cheap service: In some cases the Galicians would keep up to half the drugs for themselves in payment, but since the Colombian cartels produced such an absurd ammount of drugs, they had no trouble agreeing to it and still making a profit. After that, the narcos would take their half again and truck it to Madrid to redistribute it in the rest of Spain and other countries in Europe. Needless to say, the 80s were a cocaine and heroin epidemic in Spain and it was even worse in Galicia, because the drug runners lacked the means to export, and sold their whole half in Galicia itself. The criminal code was reformed accordingly in the mid-80s and then again in the 90s and as a result Spain imposes today some of the hardest penalties for drug dealing in Europe (though it's notable that drug posession of a small ammount for one's own use is not illegal, unlike in the USA).

You can look up the Spanish documentary Marea Blanca about the history of narcotraffic in Galicia and the 2005 film Heroína, based on the story of Carmen Avendaño, who led a campaign for the rehabilitation of drug addicts and to denounce the Galician narcos and corrupt small town politicians allied with them in the 1980s.

I was interested in this question when this was asked but had not seen Narcos yet so i refrained from reading answers. Now that i have seen the show i can comment that the phrase of running things from spain was in response to earlier suggestion by younger Ochoa brother that they should relocate to spain and run things from there because of war with colombian govt. I am not commenting on actual or historic drug cartel situation in Spain but this is the right answer of why the phrase was used in context of the show.