Nopala [1] can supply you with plenty of local-style food. If you want, start at the big market, which operates every day but is even bigger on tianguis days, Saturday and Sunday. The hundreds of native Chatino women flood into town in bright traje with their loads of calabazas (gourds), cal (lime or quicklime), camote (candied root, like sweet potato), guajalotes (turkeys), and much more.
If you’d rather not prepare your own dinner, pick out the goodies you want at the clean fondas upstairs, in the building opposite the palacio municipal on the plaza’s east side. Fonda Magali is especially recommended by guide Frédy (see below).
Or if you’d rather, go to one of the more formal comedores, such as the Sarita (on hidalgo, about two blocks downhill from the market, 8 a.m.–5 p.m. daily, $3–5); or for pizza, go to pizzeria Kore’s (on Iturbide, downhill from the plaza, noon–9 p.m. daily, $4–10), next to Frédy’s photo shop.
Links:
[1] http://www.moon.com/destinations/oaxaca/pacific-resorts/chatino-country/santos-reyes-nopala