Golden City was founded on June 16, 1859, along Clear Creek west of Denver, during the Pikes Peak Gold Rush, and named for Thomas L. Golden. William A.H. Loveland and George West were among its first settlers. Lying between the gold fields to the west and the settlements to the east, it quickly became a leading center of trade and politics. By the end of 1860, with about 700 people, it had been elected seat of Jefferson County and was capital of the provisional Jefferson Territory, chosen for its closeness to the mining towns.
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An act of November 5, 1861, moved the territorial capital to Colorado City, which held it only briefly before the government voted on August 4, 1862, to return to Golden. Although the town lost many residents during the Civil War, Golden City was capital of the federally recognized Colorado Territory from August 2, 1862, until 1867. By the mid-1860s its role was largely honorary, with the governor and legislature meeting in larger Denver, though the territorial supreme court sat in Golden after ruling in Bruce v. House that it must meet at the legal capital. The legislative and executive branches returned to Golden from late 1866 through 1867.
Golden's leaders saw that a rail link to the transcontinental line at Cheyenne was their best hope of staying the territory's commercial center, and on February 9, 1865, Loveland founded the Colorado Central Railroad, setting off a fierce railroad rivalry with Denver, which raced to build its own line.
Sources
Wikipedia: Golden, Colorado