At that time, the citizens of the other areas acquired by the United States as part of the Mexican Cession of 1848, California and New Mexico, were applying for their admission as states, so Young soon modified his application to Congress for Desert to become a state instead of just a territory. He and the elders of the Church meanwhile drafted a state constitution and set up a provisional state government, so that they would have the wheel of power when the new state was created.
Interestingly, Young did not give up on his hope for a Mormon state of Deseret even after the new territorial government was set up. Young and the elders met for almost ten years in a shadow government, which ratified all the laws passed by the territorial legislature, so theirs could be created as the official government if the state were ever created. Young petitioned for the state again in 1856, 1862 and finally in 1872, but it never came to pass.
All of this set the scene when events began to create a need for the division of the large southwestern territories into smaller units. The Utah territory, effectively run by the Mormons, was definitely not popular with Congress, which was able to show its displeasure over the next decade. Utah and New Mexico were huge territories and as new populations moved into them, the new settlers began to demand regional divisions so they could control their own affairs with a local government. Between 1861 and 1868, Congress did create new territories out of parts of Utah and New Mexico. Not surprisingly, as Utah was apportioned, none of the divisions favored the Mormon-led government of Utah.
The division of Utah was a direct result of the movement into the region of gold and silver seekers. In 1859, a major discovery of silver—what came to be called the Comstock Lode—was found on the east side of the Sierra Nevada Mountains in far western Utah Territory. Miners poured into the area and these were definitely dissatisfied with being under the control of the Utah Territorial government. Not only was the center of the government located almost at the other end of the territory, in Salt Lake City, but these miners were for the most part strongly anti-Mormon. They soon petitioned for the creation of their own territory out of the western part of Utah.
Similarly to the miners in what became Nevada Territory, the settlers along the Front Range were unhappy with what was their very distant government, located at the other end of the Kansas Territory, well to the east near the Missouri River. They also petitioned to Congress for a new territory; one group tried to create the territory of Colona and one to create the territory of Jefferson. For the same reasons that Congress was unable to act on the petition of the settlers on the east slopes of the Sierra Nevadas, it was also unable to act on the petitions of either of these Front Range groups until early 1861, when the new territory of Colorado was created.
So, from 1861 until 1866, Utah Territory lost well over half of its land through acts of Congress. It was too large to be governed practicably when first created, but much of the reduction in size had to do with Congressional bias against the Mormons. This bias is further evidenced by the fact that Nevada Territory, created in 1861, became a state only three years later in October 1864, whereas Utah Territory, created in 1850, didn’t become a state until almost half a century later, in 1896! This, naturally, happened only after polygamy was renounced in the territorial constitution that year.