Proprietary colonies were created, like any other colonies, to conquer territories, extract resources and resettle people from Europe. However, their peculiarity was that they were owned and run by individual families or the person appointed by the English Crown.
The American territories of the time of the English colonization had three forms of government: proprietary, charter, and royal. All of them were possessions of the British Empire, and proprietary colonies also were technically ruled by the English king. Nevertheless, these territories were distinguished depending on the actual form of government, or the people who controlled the political and economic processes.
One needs to look at the land’s government to understand what is the difference between the proprietary colonies and the royal colonies. The royal colonies were ruled by governours directly appointed by the British Empire. The proprietary colonies had a law that guaranteed the ownership of land by one person or family.
The owner of the colony gave it a name, created local authorities, courts, and adopted laws. Besides, this person or family determined how to use the land, collected taxes, and changed the infrastructure of the colony. Thus, the owner was actually the king in his territory, although he also obeyed the English Crown.
However, proprietary colonies had not existed long as charter colonies replaced them. In fact, proprietary colonies were also charter by definition, since charters guaranteed the ownership. However, while proprietary belonged to individuals, charter parties were provided to corporations. In other words, this type of land was given into the property of the business, which itself had decided how to manage them to get profit, but not contrary to the laws of Britain.