The Collaborative International Dictionary of English v.0.48:

Territorialize \Ter`ri*to"ri*al*ize\, v. t. [imp. & p. p.
   Territorialized; p. pr. & vb. n. Territorializing.]
   1. To enlarge by extension of territory.
      [1913 Webster]

   2. To reduce to the condition of a territory.
      [1913 Webster]

WordNet (r) 3.0 (2006):

territorialize
    v 1: organize as a territory [syn: territorialize,
         territorialise]
    2: place on a territorial basis; "The railways were
       territorialized" [syn: territorialize, territorialise]
    3: extend by adding territory [syn: territorialize,
       territorialise]