Accordingly, Peterson was elected Governor of Delaware in 1968, narrowly defeating the incumbent Governor Charles L. Terry, Jr. His first act was to remove the National Guard from Wilmington. His administration was one that enacted several substantial changes, with perhaps the biggest change being the successful implementation of the old "New Day for Delaware" plan that transformed the organization of state government. Delaware's executive departments had been run by commissions, appointed by the governor, but with considerable policy independence, and overlapping terms. As a result, the governor had control over his departments only through persuasion and the budget. The newly enacted law provided for an eleven-person cabinet organization, with department leadership provided by persons serving at the pleasure of the governor. In all, Peterson eliminated 100 commissions and boards. Neither Peterson nor his successor, Sherman W. Tribbitt, were fully able to take advantage of this change, but their successors all made it one of the foundations of the present Delaware state government.