Complex sentence: Texas had originally asked to become a territory if its statehood claim was denied, but after realizing that states controlled their own public lands, while as a territory public land would be controlled by the national government, Seguin chose not to request territorial status.
Split into simpler sentences: Texas had originally asked to become a territory if its statehood claim was denied. After realizing that states controlled their own public lands, whereas territorial public land was controlled by the national government, Seguin chose not to request territorial status.