Lagos was annexed by the British on 6th August, 1861 and was declared a Colony on the 5th of March, 1862 after the signing of the Lagos Treaty of Cessation. In effect, the powers of Oba Dosumu of Lagos were reduced. A British Consul, William McCoskry was appointed the acting governor of Lagos. The Lagos colony was protected and governed directly from Britain. During this period, Africans born in the Lagos Colony were regarded as British subjects. They enjoyed certain privileges such as access to courts and a small legislative council which had the mandate of assisting and advising the governor.
The British established the Lagos Town Improvement Ordinance, which aimed at controlling the physical development of the Lagos Colony and neighbouring areas. Subsequently, the administration was combined with that of Sierra Leone in 1866. As a result, the Governor of Lagos was reduced to the rank of an administrator. By 1974, the administration of the Colony was transferred to the British Gold Coast. Again, the administrator of Lagos became a Lieutenant Governor under the Governor of the Gold Coast. In 1886, the Lagos Colony was separated from the Gold Coast and granted a Governor of its own. An Executive Council was formed for the Colony. The Executive and Legislative Councils advised the Governor who in turn sought approval from the British Secretary of State for Colonies in London. The Executive Council had no African member until 1942 while the legislative Council had a few nominated African members.
Arising from the civil wars in Yorubaland during the period, Lagos Colony established a Protectorate over most parts of Yorubaland between 1890 and 1897. The colony and protectorate of Southern Nigeria were joined in 1906. In January 1914, Lagos became the capital of the new protectorate. Walter Egerton served as the last Governor of the Lagos Colony. It was under his administration that the Lagos Colony and Southern Nigeria Protectorate were amalgamated in 1906.