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The Declaration of Independence was a document signed by a group of colonists who were upset with their lawful king, and so decided to declare themselves independent of said king. It provides the justification for the foundation of the United States of America, but it does not actually set up said country. That had to wait for the Articles of Confederation, and when those failed, the Constitution.
The Declaration is most well-known for its phrase "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness." This is basically just cribbing from John Locke, who said that people had a right to their life, liberty, and possessions. However, it remains one of the strongest, most stirring expressions of liberal political thought, and has been something of a guiding light. Unfortunately, many people get confused as to where that comes from, and like to stick it in the Constitution for some reason.
It is also highfalutin' nonsense; the man who wrote the phrase "all men are created equal" was himself a slaveowner. It is by no means "self-evident" that all men are created equal, nor that they have a Creator, nor that a creator has given them any rights. "If there be an object truly ridiculous in nature, it is an American patriot, signing resolutions of independency with the one hand, and with the other brandishing a whip over his affrighted slaves."[1]
It also complains that King George "excited domestic Insurrections amongst us, and has endeavoured to bring on the Inhabitants of our Frontiers, the merciless Indian Savages, whose known Rule of Warfare, is an undistinguished Destruction, of all Ages, Sexes and Conditions."
Nevertheless, the idea of equal, "inalienable rights" was a revolutionary idea that profoundly affected social thought within the country. If nothing else, slaves and women who heard that phrase, or saw it in writing, looked at their lives as second-class citizens (if that), and thought "This is not my fate." Thus, the pursuit of happiness for all highlighted the problems with slavery for the first time in the American social consciousness; that inner conflict over slavery existing in a land that proclaimed itself "free" ultimately led to the Civil War.
Apprenticeship and indentured servitude declined significantly due to these ideas of liberty. William Whipple, signer of the Declaration of Independence, freed his slave believing he could not fight for liberty and own a slave. In the postwar decades, other slaveholders also freed their slaves; from 1790 to 1810, the percentage of free blacks in the Upper South increased to 8.3 percent from less than one percent of the black population. All Northern states abolished slavery by 1804.
There was an earlier version of the Declaration that was highly critical of slavery; Jefferson himself wrote a passage that indicted Britain for its involvement in the slave trade. Combine that with the pursuit of liberty statement, and many in Congress felt it was the equivalent to a call for de facto abolition. When it was removed by the largely slave-owning Continental Congress, Jefferson was furious; as President, he signed a law that officially and uniformly banned the importation of slaves. Early in his life, Jefferson once proposed automatic emancipation for slaves when they reached the age of 25, wanted to ban slavery in the territories to the west, and considered adopting full abolition into the Declaration before settling on the ban on the slave trade.
It is also the only mention of "God" or a Creator in any of the founding documents of the United States, which accounts for some of its popularity among the "America is a Christian nation" nutters.