The Colony of Vancouver Island passed a law to incorporate the Victoria as the first city in the colony. In fact it was the only incorporation that was approved by the colony of Vancouver Island.
The Act to incorporate the City was given Royal Assent on August 2th. The Daily British Colonist has the Act to Incorporate the City of Victoria in its August 4th 1862 edition and lists the full bill.
The act was given third reading on June 9th but amended by the Council of Vancouver Island on July 22nd. This was not the first time Victoria tried to incorporate.
On June 26th 1861 the Attorney General of Vancouver Island proposed a bill to incorporate Victoria. It went all the way through to third reading October 28th 1861. It did not receive royal assent, I have no idea why.
For whatever reason, it seems James Douglas did not want Victoria to be incorporated. Given that most of the people on Vancouver Island would have been in the City of Victoria, maybe the governor was afraid the mayor might be a threat to his political power?