 The Northwest Ordinance outlined the basis for government in these western lands and an administrative strurcture to oversee the territory, as well as a process for achieving statehood, while the Land Ordinance of 1785 called for the U.S. government to survey the territory for future sale and development.On May 7, 1800, the U.S. Congress passed legislation to establish the Indiana Territory, effective July 4, 1800, by dividing the Northwest Territory in preparation for Ohio's statehood, which occurred in 1803.At the time the Indiana Territory was created, there were only two main American settlements in what would become the state of Indiana