By Right of Discovery and Right of Conquest, European kings and queens claimed to own much of North America. The value of that claim for the English monarchs was essentially zero until colonies were established, land was settled, crops grown/timber harvested/fur traded, goods imported/exported at English ports, and taxes collected for the crown.
Rather than retain a claim that provided no income, English kings and queens found a way to generate funds and power. The monarchs stimulated economic development in North America by relinquishing authority over unsettled lands.
They granted charters to allies and to those willing to pay for the priviledge, creating colonies between 1607 (Virginia) and 1732 (Georgia). It was in the monarch's interest to dispose of the colonial lands to reward friends and strengthen political power in England, and to offset debts by the "sale" of charters.
As more people immigrated to the colonies, more deerskins, tobacco, lumber, and other products were shipped to England while more manufactured goods (such as cloth, wine, ceramics, and ironware) were shipped to the colonies. As poulation grew in the English colonies, shipping expanded and the monarch received more income from port fees and duties.
Though London officials soon realized the benefits of increasing the population in the colonies, the process of creating the political and economic structure for colonial development was not straightforward. Many lessons were learned from failure, but the mechanism of using land grants to steer immigrants to desired locations soon evolved.
The original charters to the Virginia Company had provided title (at least according to English law...) over a vast swath of the North American continent to a small group of venture capitalists in London. They were undercapitalized and could not make a profit from their investment, however, and in 1624 the king revoked their charter. Virginia's boundaries shrank as kings gave away portions of the territory defined in the charters of 1606, 1609, and 1612.
In 1629, King Charles I gave his attorney-general, Sir Robert Heath, the Cape Fear territory, from the 36 degree line of latitude south to the 31 degree line. The charter was never used, but that grant established a pattern. In 1663, Charles II gave the same land to eight Lords Proprietors who had been his allies in the recent English Civil War. The northern boundary of Carolina was moved to 30 degrees 30 minutes in 1665, reducing the size of Virginia even further.
In 1632, King Charles I carved Maryland out of the lands defined as "Virginia." He gave the Calvert family proprietary rights in that new colony, altering the northern boundary of Virginia. In 1649, King Charles II gave the Northern Neck to a consortium of allies during the English Civil War, and ultimately Lord Fairfax acquired title to 5.2 million acres.
The governors of Virginia retained their claim to western lands, until in 1784 the new state ceded those claims to the Continental Congress. Until that cession, the governors mimicked the pattern of the king and granted large blocks of lands to political allies.
Starting in the 1700's, groups of politically-connected individuals established land companies to speculate in unsettled lands. Between 1730 and 1745 in particular, large tracts of lands were granted to people who promised to increase settlement on the frontier, improving bordeland security for colonists in Tidewater. The colonial governors and members of the Governor's Council were often investors in those companies; Virginia officials increased their personal wealth by converting public land into private property via land grants.
Royal governors used their authority to issue land grants in order to build allies among the Virginians on the Governor's Council and in the House of Burgesses. Governor Spottswood rewarded himself by steering early settlement up the Rappahannock River rather than up the James River, in part because he had obtained rights to large tracts of land in the headwaters of the Rapidan River near modern-day Germanna.
the Indiana company sought to acquire land near Fort Pitt, while the Wabash and Illinois claims were located far to the west
Source: Library of Congress, The United States of North America, with the British territories (William Faden, 1793)