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America was fighting with Mexico in order to win the land which we  know today as New Mexico. New Mexico was once part of Mexico, so  when it finally became American territoâ¦ry, naturally they named it  New Mexico.    According to the August 2014 issue of New Mexico Magazine, quoted  Fray Angelico Chavez in his book, The Kingdom of New Mexico,  'Most people think New Mexico was derived from our neighbor, the  Republic of Mexico.
After Texas was admitted as a state to the Union, it continued to claim the northeastern portion of present-day New Mexico. Finally, in the Compromise of 1850, Texas ceded these claims to the United States of the area in New Mexico lying east of the Rio Grande, in exchange for $10 million.