No.
Incorporation is a legal term that basically means a government recognizes something (the corporation) as having legal existence.
The word comes from the phrase "to make corporeal" which is defined as "of, relating to, or characteristic of the body"– in other words, a "legal person". (This puts an interesting light on the meme "corporations are not people" since the very definition of the word basically means "legally like a person".)
https://www.thefreedictionary.com/corporeal
Anyway – a business corporation is a recognition by the government that the entity is to be legally considered like a person, that is, able to own property and enter contracts.
When the term "incorporate" or "corporation" is used with respect to a jurisdiction, like a city or territory, that means a higher level of government has recognized the lower level as having legal authority (which is different from merely legal existence).
https://en.wikipedia.org/wiki/Incorporated_town
One is not a step towards the other. What is being incorporated is different. The only similarity is that both involve formal recognition by the government that the entity exists, and the word comes from that.