It was originally called the New York Department, and consisted of all of New York State. On November 12, 1776, after the British occupation of New York City, the Highlands Department was created out of the Northern Department. The Northern Department then stopped 30 miles south of Albany. After that, it was always referred to as the Northern Department.
The Highlands Department was the smallest in area, and was formed around the defenses on the Hudson River north of New York City.