This episode marks Wil Wheaton's last appearance in TNG, though he does return for a cameo in Star Trek Nemesis.
The Pueblo Revolt of 1680 mentioned in the episode (Picard's ancestor, Javier Maribona-Picard, was one of the Spanish soldiers participating in the conflict) was a real historical event.
As a result of a long-disputed treaty with the Cardassians, the Federation has agreed to return several planets to Cardassian control. One such planet, Dorvan V, is inhabited by the descendants of Native Americans, who had left Earth to preserve their heritage on a new home. They had spent two hundred years searching for a world, having finally chosen Dorvan V twenty years before, and are unwilling to leave. Captain Picard believes they are right, but pleads with them to leave, saying that the Cardassians insist on the removal of all inhabitants. During one debate, the Indian leader tells Picard that, according to their research, Picard's ancestor had been involved in an Indian massacre in New Mexico in the 1600s; they believe Picard's involvement in their case is thus a form of kismet, an idea Picard finds disturbing.
Meanwhile, Wesley has returned from Starfleet Academy for a vacation. He's out-of-character though, snappy and caustic in manner. He is rude to La Forge in the engine room. Dr. Crusher tries to talk to her son, but gets nowhere.
On the planet, Wesley comes in contact with Lakanta, a Native American holy man of sorts. He guides Wesley on a journey of self-discovery, in which he talks to his long-dead father, who tells Wesley that he is destined to go down a different path than his own.
Meanwhile, a group of Cardassians have arrived on the planet to scout, and increase tensions with the Indians and Federation debate. Picard realizes he has no choice but to force the Indians to leave. He plans to secretly beam them up to the ship, but Wesley finds out and warns the people. When Picard criticizes his actions, Wesley quits Starfleet.
Soon the Indians capture some of the Cardassians on the planet, and a fight breaks out. The Cardassian gul is willing to send reinforcements to attack the Indians, but Picard warns him that, as the Indians are Federation citizens, he would be obligated to stop the Cardassians, which could lead to more violence between the two groups. The Cardassian gul reluctantly agrees, and beams up the Cardassians from the planet to prevent more violence.
Eventually Wesley's spirit guide reveals himself as the Traveler, with whom Wesley had contact years ago. Wesley decides to leave Starfleet and explore the universe with him.
The Native Americans, still insistent on staying on the planet, decide to forego Federation citizenship and remain on the planet under the Cardassians' control. The Cardassians agree to leave them alone.