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The town was first settled around 1644 following the establishment of a treaty between English colonists, John Carman and Robert Fordham, and the Lenape Indians in 1643. Although the settlers were from the new English colony of New Haven (1638), later incorporated into, Connecticut in 1662, a patent was issued by the government of New Netherland after the settlers had purchased land from the local natives. This transaction is depicted in a mural in the Hempstead Village Hall, reproduced from a poster commemorating the 300th anniversary of Hempstead Village.

In local Dutch-language documents of the 1640s and later, the town was invariably called Heemstede, and several of Hempstead’s original 50 patentees were Dutch, suggesting that Hempstead was named after the Dutch town and/or castle of the same name, both of which are located near the cities of Haarlem and Amsterdam. However, the authorities possibly had Dutchified a name given by co-founder John Carman, who was born in 1606 in Hemel Hempstead, Hertfordshire, England, on land owned by his ancestors since the 13th century.

In 1664, the settlement under the new Province of New York adopted the Duke’s Laws, austere statutes that became the basis upon which the laws of many colonies were to be founded. For a time, Hempstead became known as “Old Blue”, as a result of the “Blue Laws”.