New Jersey was first claimed by the Dutch. The Dutch colony of New Netherland consisted of parts of modern Middle Atlantic states. Although the European principle of land ownership was not recognized by the Lenape, Dutch West India Company policy required their colonists to purchase land which they settled. The first to do was Micheal Pauw who established a patroonship named Pavonia along the North River which eventually became the Bergen. Peter Minuit's purchase of lands along the Delaware River establish the colony of New Sweden. The entire region became a territory of England in 1664, when an English fleet under the command of Colonel Richard Nicolls sailed into what is today New York Harbor, and took control of Fort Amsterdam and annexed the entire province.
During the English Civil War the Channel Island of Jersey remained loyal to the Crown and gave sanctuary to the King. It was from the Royal Square in St. Helier that Charles II of England was first proclaimed King in 1649, following the execution of his father, Charles I. The North American lands were divided by Charles II, who gave his brother, the Duke of York (later King James II), the region between New England and Maryland as a proprietary colony (as opposed to a royal colony). James then granted the land between the Hudson River and the Delaware River (the land that would become New Jersey) to two friends who had remained loyal through the English Civil War: Sir George Carteret and Lord Berkeley of Stratton. The area was named the Province of New Jersey.
Since the state's inception, New Jersey has been characterized by ethnic and religious diversity. New England Congregationalists settled alongside Scots Presbyterians and Dutch Reformed migrants. While the majority of residents lived in towns with individual landholdings of 100 acres (0.4 km2), a few rich proprietors owned vast estates. English Quakers and Anglicans owned large landholdings. New Jersey remained agrarian and rural throughout the colonial era, and commercial farming only developed sporadically. Some townships, such as Burlington on the Delaware River and Perth Amboy, emerged as important ports for shipping to New York and Philadelphia. The colony's fertile lands and tolerant religious policy drew more settlers, and New Jersey boasted a population of 120,000 by 1775.
Settlement for the first 10 years of English rule was along Hackensack River and Arthur Kill and settlers came primarily from New England. On March 18, 1673, Berkeley sold his half of the colony to Quakers in England, who settled the Delaware Valley region as a Quaker colony. (William Penn acted as trustee for the lands for a time.) New Jersey was governed very briefly as two distinct provinces, East and West Jersey, for 28 years between 1674 and 1702, at times part of the Province of New York or Dominion of New England.
In 1702, the two provinces were reunited under a royal, rather than a proprietary, governor. Edward Hyde, Lord Cornbury, became the first governor of the colony as a royal colony. Lord Cornbury was an ineffective and corrupt ruler, taking bribes and speculating on land, so in 1708 he was recalled to England. New Jersey was then ruled by the governors of New York, but this infuriated the settlers of New Jersey, who accused those governors of favoritism to New York. led the case for a separate governor, and was appointed governor by King George II in 1738.
