Stewart had previously been Lord of Lorne, but resigned that title - which came with substantial comital power - under pressure from James III; James wished to weaken the remaining power of the Black Douglases, who had been allies of Walter's uncle, The Black Knight of Lorn.
The creation of Lord Innermeath was designed as immediate compensation for Walter's loss of Lorne; he received it on the same day that Lorne was resigned.
The Lordship of Lorn was subsequently awarded to Colin Campbell, husband of Walter's niece (Isabel Stewart), who became Earl of Argyll soon after.
The Lords of Innermeath claimed rights to office in the Sherrifdom of Perthshire.
[1] The sixth Lord Innermeath was further ennobled as the Earl of Atholl in 1596, but both title became extinct upon the death of James Stewart, 2nd Earl of Atholl and 7th Lord Innermeath.