The Proclamation of 1763 was a royal order from the king saying that American colonists could not settle or trade west of the Appalachian Mountains. This was one of the first acts of the British government that sent the colonists down the road to rebellion.
After the French and Indian War, the British government wanted to keep its costs down. One way to do this was to stabilize relations with the Native Americans so that there would not be any demands on British troops to keep settlers safe. The British government also wanted better control over the fur trade with the Indians. For these reasons, the government did not want settlers west of the mountains.
The proclamation ended up being very important. It was one of the first actions of the British government that made the colonists feel that they were being controlled to an excessive degree by the government. This helped create unhappiness among the colonists. This discontent eventually built up due to other actions of the government and led to the Revolutionary War.
The Proclamation of 1763 forbade British colonists to cross an imaginary boundary along the crest of the Appalachian Mountains. The purpose of this was to avoid conflict between the trans-Appalachian Indians and the British colonists who were seeking inexpensive land.