Sandwiched between Flemish Kanada and the Swedish Empire's New World Provinces to the south and west, the Federation began as a marriage of convenience. After Neu Kurland's declaration of independence, following the Izhorian conquest of the Duchy in 1690, the merchants of Manahata, New Mitau (OTL Boston), Jakobsburg (OTL Camden, New Jersey) and the smaller settlements in between did not want to see their prosperous land and hard-won autonomy lost to the resurgent Swedes, or be crushed by the Flemish Inquisition. The Haudinsaunie, with whom they already had a strong trading relationship, offered a source of raw military strength.
On the part of the Haudinsaunie, they had by and large been able to fight off the Scots and Spanish, and later the Swedes and Flemish, but at a dreadful cost in lives. The wise among them could see that sooner or later, they would be swallowed like a rabbit by a snake. By bringing these Kurlanders in as brothers, they hoped to gain the knowledge and an ongoing source of the weapons they needed to face the other European nations as equals, and since the Kurlanders were comparatively small in number, they hoped to do so without being overwhelmed.
Over the next three centuries, the two peoples grew ever closer, with the shared problems and opportunities of the new nation drawing them together. The close and long lasting military relationship (termed the "Unholy Pact" by the Flemings) which the Federation cultivated with the Moroccans, who after their decisive defeat of the French fleet in the Battle of the Tortugas have been the dominant force in the Caribbean for more than 200 years, had more than a little to do with their success as well.
Today, the population of nearly thirty million (spread across what would in OTL be Massachusetts, Connecticut, Rhode Island, the southern third of New Hampshire and the southern half of Vermont, New York State less the northern half of the Adirondacks--and the eastern third of Long Island which was ceded to Morocco, New Jersey, the northern third of Pennsylvania, the northern portion of Ohio, and the southeastern part of Michigan) is somewhat more European than Aboriginal, but about half of the citizens have all or some Aboriginal ancestry. Along with German, Common Haudinsaunie is one of the two official languages of the Federation, the only Aboriginal language to have this distinction east of the Continental Divide and north of the Equator.
Please pardon my very limited artistic skills. I hope that the design will make up for it. The flag is based upon the "Hiawatha Belt", a symbol of the Iroquois League, presently used by the OTL Iroquois tribes as a flag, and one of the merchant flags used by the Duchy of Courland, which featured a crab on a red background. The symbolism of the crab, which has a hard shell and claws which can give a nasty pinch to an attacker, is an added benefit.
Flemish, Swedish, Kurlander, Scottish, Spanish, and Moroccan colonies in N. America? Is this history based on an EU3 game?