Idaho Territory at its inception included what is now Montana. The size of the territory was going to make governing it from anywhere difficult. Fortunately, an influx of gold-seekers into mining camps across the Bitterroots led quickly to the formation of Montana Territory in May 1864.
Miners were also pouring into camps in the Boise Basin. A census of the territory in September 1863 showed a total population of 32,342, including 12,000 who would soon be in Montana. That left 20,342 in what would end up in the territory/state we know today. Boise County, which included the boomtowns of Idaho City and Atlanta, boasted 16,000 residents. With four times the residents in the south as in the north—the census missed Franklin and Paris for some reason—a seat of government in southern Idaho made sense.
It’s important to note that the Idaho Territorial Legislature had yet to designate any town as the seat of government at that point. In November, 1864, the second legislature assembled in Lewiston. Legislators from the northern part of the territory tried to dodge the issue of naming a capital by proposing to ask Congress to create a new Idaho Territory to include the panhandle and eastern Washington. Southern Idaho could do whatever it wanted. This would have left the southern part of the territory shaped something like Iowa (how would Easterners ever tell them apart??).
The southern legislators had enough clout to stop that idea, and they had enough votes to establish Boise as the permanent capital of Idaho Territory.
At the end of the second territorial legislature, Lewiston Lawyers fought the decision. They claimed the legislature had convened on the wrong day and thus many legislators weren’t really legislators.
Then Territorial Governor Caleb Lyon, perhaps not having the stomach for this fight, simply left the territory. Quoting the Idaho State Historical Society Reference series on the subject, “Boise partisans tried to swipe the territorial seal and archives in order to remove them to Boise, Lewiston established an armed guard over the papers themselves. Both sides used loud language about each other, and there were petitions to Congress and hearings before a probate judge. His was not the proper court to hear the matter, but the proper court was incapacitated for reasons which embarrassed Lewiston. The territorial supreme court was not yet organized. The judges had not yet gotten together, and anyway the court was supposed to assemble in the capital and nobody knew where the capital was.”