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A charter colony was one of the three types of colonies that existed in the British Empire during its height of power. The others were proprietary colonies and royal colonies.

Charter colonies were promoted through private enterprise under charters from the crown. Generally, they were established by groups of settlers who were granted charters by the king and had more control over their own affairs than did the other types of colonies, which were ruled more directly by the British. They were founded by trading companies, by lords proprietors and by squatters later incorporated. Colonies of the first type for the most part either disappeared or changed their status early. The Virginia Company lost its charter in 1624, the New England Council surrendered its patent in 1635, the Providence Island colony was conquered by Spain in 1641 and the Massachusetts Bay Company became a theocracy, leaving the Bermuda Company as the only one of its kind in control of a colony through the greater part of the 17th century. Connecticut and Rhode Island, founded as squatter colonies by dissenters from Puritan Massachusetts, received charters of incorporation early in the English Restoration (restoration colony).

The predominating type throughout the 17th century was the proprietary colony. Of this sort was Carlisle's Caribbean grant, Maryland. Maine, in the early part of the century, and after 1660 the Carolinas, New York, the Jerseys, the Bahamas and Pennsylvania. Similar institutions of government developed in all of the charter colonies. All ultimately had governor, council and house of representatives, the two former chosen by company or lord proprietor, and in the corporation colonies, indirectly by the people. The house of representatives, first the voluntary concession of the trading company, as in Virginia and Bermuda, later became a generally accepted institution in all chartered colonies except New York. Government in the corporation colonies was the freest from outside control. Perhaps because they were settled without the mediation of trading company or proprietor, the inhabitants of those colonies from the beginning cherished a conception of government based on sovereignty of the people. When the restoration English government turned its attention to the building of a colonial policy, it found charters obstacles in the path. Several colonies were royalized, and, with the view of ultimate consolidation of all colonial possessions into a few large units, the Dominion of New England was established. Its failure brought temporary reaction in favor of charter colonies, but throughout the 18th century the process of royalization went on until by 1776 only two proprieties, Maryland and Pennsylvania, and two corporation colonies, Connecticut and Rhode Island, remained. Except in the corporation colonies the people seem to have preferred royal rule.

• Dictionary of American History by James Truslow Adams, New York: Charles Scribner's Sons, 1940

• Commonwealth

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