This story seems to have been created at the tiime of the Eastern Cherokee payment. Two-thirds of the people who applied had no Cherokee connection. Lawyers posted ads soliciting applications. They encouraged people to apply , then charged them for sending for the forms, for filling them out, writing letters, obtaining "sworn statments" and the like, knowing full well that the applicants would never be approved.
"Betsy Walker" was supposedly born about 1730, her daughter about 1750-1755. Trade with the Cherokee was regulated, limited, and risky during this time and there were only a limited number of traders. Their names appear in colonial records. White traders took Cherokee "wives" while they were in the Cherokee Nation in order to gain status with the tribe; most had white families "back home." A very few traders - whose names are well-known - settled with the Cherokee. No white men took Cherokee women back to English territory - a dark-skinned, tattooed, non-English speaking woman would have been both widely noted and unwelcome and the women would have had no reason to go with them. The Cherokee were matrilineal and biological fathers weren't considered blood relatives. Your family was your clan, your sisters, your mother and her brothers. A home belonged to the woman, not her husband. "Marriage" in the European sense was not a concept, although some couples did stay together for long periods. A Cherokee person who left the nation would become a non-person. Not only was intermarriage against the law but the Cherokee were essentially at war against the white settlers until 1794. The Cherokee supported the British in the American Revolution and were under frequent attack from Americans, not living with them.
If Betsy Walker was Cherokee and she had a daughter, both women would have remained in the Cherokee Nation. If Betsy Walker Leatherwood was Cherokee, her husband wouldn't have needed a land grant from North Carolina - he would have had all the land he wanted in the Cherokee Nation. He also would have had to travel to the Cherokee Nation - on the other side of the Great Smoky Mountains, find Betsy, and somehow convince her to leave her home and move with him to an unknown place. That just makes no sense. There is nothing to suggest that Edward Leatherwood was ever in the Cherokee Nation or that his wife was anything but the white woman listed on every census.