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After the war, Scott visited the western frontier in 1785 and began to make preparations for a permanent relocation. He resettled near present-day Versailles, Kentucky, in 1787. Confronted by the dangers of Indian raids, Scott raised a company of volunteers in 1790 and joined Josiah Harmarfor an expedition against the Indians. After Harmar's Defeat, President Washington ordered Arthur St. Clair to prepare for an invasion of Indian lands in the Northwest Territory. In the meantime, Scott, by now holding the rank of brigadier general in the Virginia militia, was ordered to conduct a series of preliminary raids. In July 1791, he led the most notable and successful of these raids against the village of Ouiatenon. St. Clair's main invasion, conducted later that year, was a failure. Shortly after the separation of Kentucky from Virginia in 1792, the Kentucky General Assembly commissioned Scott as a major general and gave him command of the 2nd Division of the Kentucky militia. Scott's division cooperated with "Mad" Anthony Wayne's Legion of the United Statesfor the rest of the Northwest Indian War, including their decisive victory at the Battle of Fallen Timbers.
Having previously served in the Virginia House of Delegates and as a presidential elector, the aging Scott now ran for governor. His 1808 campaign was skillfully managed by his step-son-in-law, Jesse Bledsoe, and he won a convincing victory over John Allen and Green Clay. A fall on the icy steps of the governor's mansion early in his term confined Scott to crutches for the rest of his life, and left him heavily reliant on Bledsoe, whom he appointed Secretary of State. Although he frequently clashed with the state legislature over domestic matters, the primary concern of his administration was the increasing tension between the United States and Great Britain that eventually led to the War of 1812. Scott's decision to appoint William Henry Harrison as brevet major general in the Kentucky militia, although probably in violation of the state constitution as Harrison was not a resident of the state, was nonetheless praised by the state's citizens. After his term expired, Scott returned to his Canewood estate. His health declined rapidly, and he died on October 22, 1813. Scott County, Kentucky, and Scott County, Indiana, are named in his honor, as are the cities of Scottsville, Kentucky,