Despite the acquisition of this large swath of land, the British
tried to discourage American colonists from settling in it. The British
already had difficulty administering the settled areas east of the
Appalachians. Americans moving west would stretch British administrative
resources thin.
Further, just because the French government had yielded this
territory to Britain did not mean the Ohio Valley's French inhabitants
would readily give up their claims to land or trade routes. Scattered
pockets of French settlers made the British fearful of another prolonged
conflict. The war had dragged on long enough, and the British public
was weary of footing the bill.
Even
after Britain issued the Royal Proclamation of 1763, Daniel Boone
continued to settle areas west of the Appalachian Mountains. This 1851
painting, Daniel Boone Leading Settlers through the Cumberland Gap, depicts the popular image of a confident Boone leading the early pioneers fearlessly into the West.
Moreover, the Native Americans, who had allied themselves with the
French during the Seven Years' War, continued to fight after the peace
had been reached. Pontiac's Rebellion continued after the imperial
powers achieved a ceasefire.
The last thing the British government wanted were hordes of American
colonists crossing the Appalachians fueling French and Native American
resentment.
The solution seemed simple. The Royal Proclamation of 1763 was issued, which declared the boundaries of settlement for inhabitants of the 13 colonies to be Appalachia.
Source: http://www.ushistory.org/us/9a.asp
