As the American Colonies began to settle, the King of England, would grant land titles to certain individuals. They were allowed to claim this land all the way to the Pacific Ocean. At times though several grants could be super imposed on each other and this happened with New York and Massachusetts.
In much of the land in question was inhabited and owned by the Iroquois. That was until 1779, when several expeditions, brought terror to the Finger Lakes region with many settlements being burned or wiped out under Gen Sullivan. These actions allowed settlements of the Europeans to come in.
After the war, in 1786, a special convention to settle the claims between Massachusetts and New York was held in Hartford, Connnecticut. Massachusetts needed money, New York needed clear title to one and one half million acres it had promised for military bonuses.
At Hartford, in return for the establishment of the eastern boundary of New York where it is now rather than at the Connecticut River, Massachusetts gave up all territorial claims to lands west of this new boundary. Massachusetts was given, in addition, the pre-emptive right to approximately six million acres of land in western New York. This settlement meant that New York would eventually have the political jurisdiction and sovereignty over this area, but Massachusetts was to have the right to the first purchase of the land from the Indians. In other words, the Indians would hold the land as long as they pleased, but could sell it only to Massachusetts or to people designated by Massachusetts. As soon as Massachusetts either bought and resold the land or sold their right of purchase, the land became a part of New York.
The line on the east, marking off this area, became known as the Pre-emption Line. This line was to run due north to Lake Ontario from a point 82 miles west of the Delaware River on the New York-Pennsylvania border. This line approximates the present line between Chemung and Steuben counties.
Pre-emption means, "the act or right of first purchase." Hence, the east and west pre-emption lines mark the boundaries of the area where Massachusetts had the right of first purchase from the Indians. Two gentlemen, Phelps and Gorham purchased the lands from Massachusetts (which reverted the claims to NY)
Many disputes arose about this line, the first came in 1792, when it was discovered that the line was 2 miles off and was redrawn down Seneca Lake and would become the Seneca/Ontario County line, leaving the original Pre-Emption line as Pre-emption road. As late as 1965, the matter was taken to NYS for clarification, where it was turned back to a local issue. This selection was taken from http://crookedlakereview.com/articles/1_33/31oct1990/31hilbert.htm