Why was there no Delaware Colony?

When peering at the various boundaries throughout the US, there is one that stands out for an odd reason: the Pennsylvania - Delaware boundary. It's almost circular.

How did such a thing come about? When looking at this arc, its center is not at Wilmington, which is the capital of Delaware. It is New Castle, which is located 12 miles from this border. This arc has also been called "The Twelve Mile Circle".  When William Penn received a charter for his new Province of Pennsylvania on February 28. 1681, his new province was:

"bounded on the East by Delaware River, from twelve miles distance Northwards of New Castle Towne unto the three and fortieth degree of Northerne Latitude... The said Lands to extend westwards five degrees in longitude, to bee computed from the said Easterne Bounds".

This boundary by New Castle was described as:
"a Circle drawne at twelve miles distance from New Castle Northward and Westward unto the beginning of the fortieth degree of Northern Latitude"

There was confusion if the the circle was supposed to have a diameter, radius, or circumference of 12 miles around New Castle. In the end, a radius of 12 miles was used. In fact, this extends all around New Castle including the border of New Jersey. In fact, there are parts of land attached to the NJ side of the Delaware River that are technically in Delaware because it falls within 12 miles of New Castle. Most websites and blogs stop there. But where did this 12 mile distance come from?

The area was originally colonized by the Dutch and the Swedes. One of the main forts in the area was in New Castle. Eventually, the British would win control over this region (and the Hudson River valley). Charles II granted all the land west of the Connecticut River to the east side of Delaware Bay to his brother, the Duke of York, in 1664. The region of present day Delaware was outside this. Since, the Duke was given the Dutch claims along the Hudson River, the Duke assumed control over all other Dutch areas on the west bank of the Delaware Bay.  

But if you look further back, this area was given to Lord Baltimore in his Charter of Maryland in 1632. The northern boundary of this new colony was at the 40th degree latitude. The land included all parts west of the Delaware Bay up to the mouth of the Potomac River and up to the headwaters of the Potomac. As shown on the right, this would include present day Delaware. Lord Baltimore tried to claim that his grant included the region that the Dutch had settled. Lead by Augustine Herman, the Dutch countered that Baltimore's claim includes land that had not been settled which was not the case for the west bank of a Delaware Bay. Hence, that region should be excluded. In the end, the two parties decided to divide the peninsula in half but such a line was not marked until Mason and Dixon surveyed it in the 1760s. So there is no mention of 12 miles in this part of the story. 

When William Penn attempted to form a colony in the area, his grant of 1681 mentions the southern boundary to be at the 40th degree latitude. In those days, there was a variation of interpretation for this. Some drew a boundary line at the start of the 40th degree. Others would surveyed a line at the end of the 40th degree. This amount of variability could leave Philadelphia in Maryland or Baltimore City in Pennsylvania. The agents for the Duke of York thought the 40th degree was about 20-30 miles north of New Castle (so outside of this newly acquired region). William Penn and the head of the Privy Council (Lord Chief-Justice North) thought it was about 12 miles north of New Castle. So this is the origin of this particular distance. The supposed southern border of Pennsylvania would approach the west bank of the Delaware and get as close as 12 miles from New Castle. The best outcome would be the 40th degree latitude would meet at the top of this circle. In the end, the 40th degree was too far north and further negotiations would lead to the present day boundaries. 

But there is one more tidbit. In 1682, Penn would received a deed from the Duke of YOrk to "rent out" the "Lower Counties on the Delaware" to provide more access to the Delaware Bay. There was still a dispute between the Duke of York and Lord Calvert (of Maryland) as to who actually controlled this previous Swedish colony. Regardless, the Duke deeded it to Penn on August 24 (or 28), 1682. This claim by Penn was solidified by King James's compromise in Nov 1685 to divide the peninsula in half above the Cape Henlopen line of latitude which placed those Lower counties under the rule of the King (to Duke to Penn).

Eventually, those living in this region would want to have their own government that was not linked to Philadelphia.  This was somewhat granted in 1701 where there would still be a single governor but the local representatives would function independently from Philadelphia. After the Declaration of Independence was signed, these three counties quickly organized into an independent state with the creation of its own constitution in September 1776. Eventually, it would be the first state to ratify the new US Constitution in 1787. So, first state in this new Federal union wasn't even an official British colony.