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I remember as a kid most states didn't have primaries but just caucuses and conventions. IRC, New Hampshire was the first to set up such a open system and thus got the most "pump" and then when others followed, they were given the "first in the nation" status. Iowa didn't really come into importance until 1980 and because it was a caucus not a primary, it also got special status. There's no solid rules, just precedence.
One reason those two states were popular were the size (as you note how big Florida is) and the locations. Iowa, being in the Midwest was easy for Washington pols to fly off to on weekends and vacations...New Hampshire is just a Metroliner ride to Boston. A candidate could cover the entire state and it conserved both money and resources. The term "retail politics" is best applied. I lived in Iowa in 1988 and there wasn't a person in the state I met that year that hadn't met one if not several of the candidates.
Since most states hold primaries many wanted both the media coverage and attention and thus began to move their primaries closer to New Hampshire. Many of these states felt that the front-loading of attention and money in these states were not proportional and that by the time the primaries got to their state (like mine: Illinois), the nomination was a done deal and voter turn-out was lower.
I think the DNC is on the right track in a future solution here...setting up several regional primaries in small states first and then onto larger ones that let the smaller candidates (Kucinich for example) to conserve their money and still get a shot at winning early and then by the time the bigger states (and television markets) roll around, the field is narrowed.
Cheers...
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