disgruntled farmers disguised themselves as “Indians,” dressed in “calico gowns and leather masks”

New York’s law dates back to 1845, when lawmakers tried to quell uprisings by tenant farmers who "used disguises to attack law enforcement officers," according to a later U.S. Court of Appeals ruling. A dip in the price of wheat left many in debt to landowner Stephen Van Rensselaer IV.

After Mr. Rensselaer moved to evict tenants, disgruntled farmers disguised themselves as "Indians," dressed in "calico gowns and leather masks" and attacked agents of the landlords. The court papers said the tactics adopted by these rebel groups ranged from "tarring and feathering" to murder, including a sheriff.

The law was amended in 1965 to prevent masked gatherings of two or more people, with a significant exception: "a masquerade party or like entertainment." It received substantial attention in 1999 when, on the basis of the law, the city rejected a request from splinter group of the Ku Klux Klan to hold a masked protest in Manhattan.

via Rare Charge in Protest – WSJ.com.