This study assesses the multiscalar and nonlinear relationships between drought severity, characterized by the Standardized Precipitation Index (SPI) and the Standardized Precipitation Evapotranspiration Index (SPEI), and media-reported hydrological and agricultural impacts across Spain during 1976–2023. Drought indices were derived from a high-resolution gridded climate dataset (1.1 km), while impact data were obtained from standardized monthly frequencies of drought-related newspaper articles at the provincial scale. Results demonstrate robust temporal coherence between drought conditions and impacts, with major drought episodes associated with anomalies exceeding +1 to +2 standard deviations. Drought–impact relationships strengthen markedly with accumulation timescale, reaching maximum correlations at 12–24 months (|r| ≈ 0.6–0.8), while short timescales (1–3 months) show weak associations (|r| < 0.3). Hydrological impacts are primarily associated with accumulated medium- and long-term moisture deficits (12–48 months), whereas agricultural systems respond more rapidly to short- and intermediate-term drought conditions (3–12 months). However, both sectors shift to longer time scales as drought severity increases. Sensitivity analyses reveal pronounced nonlinear responses, with impacts increasing disproportionately during severe drought conditions with a peak at 12–36 months. The consistently stronger association of SPEI relative to SPI, especially in case of agricultural impacts, suggesting a dominant contribution of atmospheric evaporative demand. Our results indicate that drought impacts are governed by the accumulation and nonlinear propagation of moisture deficits modulated by temperature-dependent processes and provide a framework for improved impact-based drought monitoring in a warming climate.