Original: Lancaster has several unique ties to the British monarchy; the House of Lancaster was a branch of the English royal family, whilst the Duchy of Lancaster holds large estates on behalf of Elizabeth II, who herself is also the Duke of Lancaster. Lancaster was granted city status in 1937 for its "long association with the crown" and because it was "the county town of the King's Duchy of Lancaster".
Simplified: The larger City of Lancaster local government district is named after Lancaster.