I had to overlap the objects so that I can create territories within a territory, which doesn't work because it's overlapping. So how do you create create territories within a territory?

nvm, i got it

I'll answer anyway! You have to create a hole in the bigger territory, that way they're technically not overlapping (they just look like they do.)

how do you create a hole?

Look into Inkscape's Path -> Exclusion option.