Prior to the creation of the Nevada Territory, the area was part of western Utah Territory and was known as Washoe, after the native Washoe people. The separation of the territory from Utah was important to the federal government because of its political leanings, while the population itself was keen to be separated because of animosity (and sometimes violence) between mainstream Christians in Nevada and Mormons from the rest of the Utah Territory.
Despite the silver wealth of Nevada, and the ever-increasing population of miners that came to exploit it, Nevada was not quite populous enough to warrant statehood. A common misconception was that the Union needed Nevada's silver for the war effort, but as a U.S. Territory, the U.S. could take it if they so needed. The real reason Nevada was rushed into statehood was due to the 1864 Election, in which Abraham Lincoln needed a few more sure votes in the Electoral College to be re-elected.
The eastern boundary of Nevada Territory had been defined as the 116th meridian, but when gold discoveries were made to the east the Nevada territorial delegation to Congress requested the boundary moved to the 115th meridian, which Congress granted in 1862. The border was shifted further east, to the 114th meridian, in 1864, in part due to the discovery of more gold deposits. These eastward shifts took land away from Utah Territory. The southern border of Nevada Territory had been defined as the 37th parallel, but in 1866 Nevada asked Congress to move the border south to the Colorado River. Congress granted the request in 1867, giving Nevada all of the western end of Arizona Territory. Arizona strongly protested, but found little sympathy in Congress due in part to Arizona having aligned with the Confederacy during the Civil War.
The exact location of the California-Nevada border, between Lake Tahoe and the intersection of the 35th parallel with the Colorado River, was contentious and was surveyed and re-surveyed well into the 20th century. Congress transferred some of the lands west of the Colorado River including Pah-Ute County, Arizona Territory to the State of Nevada on May 5, 1866. Part of this southern tip of Nevada was established as Clark County in 1909 and contains the city of Las Vegas.
The territorial capital was moved from the provisional capital of Genoa to Carson City. James Warren Nye succeeded Isaac Roop, the first provisional territorial governor, and became the only territorial governor. The secretary of the territory was Orion Clemens, older brother of Samuel Clemens (Mark Twain).