Originally belonging to the Six Nations Confederacy of the Iroquois, the first Euro-American settlement in the area of Erie, Pennsylvania was Fort Presque-Isle, ("Fort Peninsula") founded by the French in 1753.
After the French and Indian War (1754-1763) as The Seven Years' War was known in North America, the area passed to Great Britain. It was claimed by the Colonies of Pennsylvania and New York, but since the western boundaries of the 13 Colonies were unfixed and the area unsettled, it was under British military administration.
When the United States and Great Britain signed the Treaty of Paris in 1783, the region around Fort Presque-Isle became part of the United States, and part of New York State, although Pennsylvania, Connecticut, Massachusetts and the Six Nations all had competing claims.
The Iroquois claim was settled by the payment of a miserable $2,000 to the Iroquois.
The Federal Government stepped in to mediate the State claims. The Massachusetts and Connecticut claims were dismissed, and the area was formally awarded to New York State in 1789.
However, since Pennsylvania was otherwise landlocked, the Federal Government purchased the lands around Fort Presque-Isle from New York State for $150,000, and awarded them to Pennsylvania, giving the Quaker State an outlet on the Great Lakes and a share in the rich mercantile business being shipped along the frontier into the Old Northwest. Fort Presque-Isle and its environs became Erie County, Pennsylvania in 1792. The City of Erie itself was established in 1795.