The ethnicity with contemporary demographic characteristics is a reflection of characteristics in the formation and development of an ethnic group and has been deeply influenced by environmental and geographic conditions （such as nature， society， economy， etc.）. Just like two sides of a coin， ethnicity is the ″shadow″ or ″reflection″ of the historic environment and is also a sort of ″historic territoriality.″ The education level and the dispersion of the population spatial distribution enhanced by ″edge effect″ and ″stress effect″ are the main environmental forces shaping an ethnic group's demographic characteristics． The connotation of territoriality theory is associated with ″geographic divergence″ （the demographic characteristics of different places in the same ethnic group tend to be divergent because of the long-term influences of different environments）， ″ethnic convergence″ （the demographic characteristics of different ethnic groups tend to be similar because of the long-term influences of the same environment） and ″settlement imprint″ （an ethnic group's demographic characteristics are shaped by the place of settlement and are hence imprinted）. Besides the connotation， the territoriality theory of the ethnic demographic characteristics in spatial distribution is also proved by ″the combined-effect principle of geographical factors″ ″the discrete effect″ and ″the educational effect．″ The theory of spatial distribution of demographic characteristics is proven by the following empirical evidence. On one hand， the differences in the demographic characteristics between the east and the west as well as between the south and the north are shown to be significantly correlated with dispersion， and with the average years of schooling， and within all 36 kinds of connections, 31 are related， 28 significant and 21 very significant. On the other hand， the degree of overlap between the regions is also very significant: the east has an overlap of 75%， the west 80.9% （according to the settlement classification and the comprehensive factors clustering classification of demographic characteristics）， the southwest 90.3%， and the northwest 62.5% （by the settlement classification and the set classification of comprehensive factors） ． It is crucial to pay equal attention to territoriality and ethnicity， which is the theoretical foundation to a thorough understanding and proper treatment of ethnic relations. ″Discrete effect″ is the theoretical basis and the motive power of the communication and relation with ethnic groups and of the ″reform and opening up″ policy. ″Settlement imprint″ shows that local development and protection play a fundamental role in the development of an ethnic group. In the ethnic demographic characteristics， ″the suitable policy vacuum″ caused by ″geographic divergence″ and ″the policy friction″ caused by ″national convergence″ result in the ″appeals″ for adjustments of ethnic policies and are the very basis of such adjustments. An ethnic policy which integrates the differences and similarities of ethnic groups helps to promote ethnic solidarity and to maintain social stability． The new findings of this paper are listed as follows: first， an ethnic group's demographic characteristics are shaped by the environment and ethnicity reflects the ″historic environment.″ Second， the demographic characteristics of ethnic groups are characterized by ″geographic divergence″ and ″national convergence.″ Third， the current ethnic policy is characterized by ″a suitable policy vacuum．″ The significance of this study is to answer the following questions at theoretical and empirical levels: Are the ethnic groups' demographic characteristics a manifestation of ethnic characteristics/ethnicity， or are they influenced by the environment and deeply imprinted by territoriality？ Why does the spatial distribution of the population become the shaping power of an ethnic group's demographic characteristics？ This research tries to provide a theoretical basis for further research in several aspects in ethnic demographics: the shift of methodologies， the formulation of development strategies in the ethnic regions， the adjustment of ethnic policies and the elimination of ″absolute ethnicity″ （strong ethnicity） with the ultimate aim of promoting national unity. The research integrates deduction with empirical evidence. The main shortcoming of this paper is that due to the word limit， some parts of this new theory are not fully explained．