Minor quibble: the Navajos moved around a bit. They didn't move into the New Mexico region until around 1000AD, splitting off from the Atabaskans (sp?) at that time. The present-day Navajo nation wasn't where they originally were, ever after 1000AD...the US government allotted some of the worst land they could find as "reservations" and made the natives move there (e.g. the Seminoles in OK were originally from FL, but were force-marched to OK).

Today, we do have a sort of two-state solution. The Navajos are autonomous. They have their own government, their own police force, etc. They have to abide by the Constitution, and are regarded as American citizens by birth. But the Navajo nation is in some ways a foreign country, and visitors have to abide by their rules (which, fortunately, closely mirror white-American rules).

We definitely are the colonists on these lands. The native Americans are the original inhabitants.

Note: not just the Navajos. All the reservations are autonomous.