The Dakota Territory consisted of the northernmost part of the land acquired in the Louisiana Purchase in 1803, as well as the southernmost part of Rupert's Land, which was acquired in 1818 when the boundary was changed to the 49th parallel. The name Dakota refers to the branch of the Sioux tribes that occupied the area at the time. Most of the Dakota Territory was formerly part of the Minnesota and Nebraska territories.

When Minnesota became a state in 1858, the leftover area between the Missouri River and Minnesota's western boundary fell unorganized. When the Yankton Treaty was signed later that year, ceding much of what had been Sioux Indian land to the U.S. Government, early settlers formed a provisional government and unsuccessfully lobbied for United States territory status. Three years later President-elect Abraham Lincoln's cousin-in-law J.B.S. Todd personally lobbied for territory status and the U.S. Congress formally created Dakota Territory.

North and South Dakota were later, respectively, the 39th and 40th states to join the Union on November 2, 1889.

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