How did the early United States decide to deal with the western lands?

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I assume that you are asking about the United States here and I have changed your question to reflect this.

The early United States decided to deal with the western lands by setting up a clear way in which those lands could eventually become states.  This was one of the most important rules that was set out by the Northwest Ordinance.  This law ensured that the states that already existed would not be able to colonize areas in the west.  Instead, the areas in the west would be settled and would, once they were settled, follow an orderly process towards becoming full members of the Union.

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