This is a preparatory study for socio-economic history of West Sumatra of Indonesia. West Sumatra constitutes the largest matrilineal society which still exists in the world. The West Sumatran village (nagari) is known to have been highly autonomous, perhaps in more perfect form than any other type of Indonesian villages, at least in the Dutch colonial period. The autonomy was supported mainly by its distinctive land system and the village treasury system. The land system nagari is of great interest because of strong village disposal right (hak ulayat), the existence of clan land (tanah suku), and the communal land ownership by matrilineal extended family, all of which are observable to some extent even now. The present study attempts to understand the origin of those features of the land system in relation to the proceeds of nagari formation by using about 100 folk stories of village history. There were two ways to establish a new nagari; one being the establishment of nagari outside the mother nagari, and the other being the split of mother nagari. In either case communities of new settlement developed from taratak, through dusun and koto to nagari at the apex, the settlement was organized by clan (not a genealogical unit but an exogamy group), and members of the same clan lived side by side forming a vague territorial boundary. Only when the new community developed into koto, the residents could install their own chief and disposal rights over the clan land, until which stages they were under the control of mother nagari. When a nagari was finally established all the clan lands were put together resulting in the formation of a village territory; and the land rights of each clan over clan land was partially absorbed by the nagari. In this way the nagari, as a legal personality, came to have the highest disposal right over all its territory on the one hand, and each clan retained secondary land rights in the form of clan land. However, the substance of clan land have been fading away in the course of historical processes. The nagari levied quite a large number of customary dues (isi adat) both upon villagers and nutsiders. Most of the dues were enjoyed by chiefs (penghulus), but part of them were deposited in the village treasury. The dues can be divided into five categories: (1) dues related to the hak ulayat: (2) dues on commercial activities; (3) social dues; (4) Islamic dues; and (5) occasional contributions for public purposes of nagari. Based on the strong village territorial right and the treasury, the nagari appeared to be something like a 'village republic' until relatively recent times.