Bavaria was the first state to issue postage stamps in 1849, followed soon by Baden, Bergedorf, Braunschweig, Bremen, Hamburg, Hannover, Heligoland, Lübek, Mecklenburg-Schwerin, Mecklenburg-Strelitz, Oldenburg, Prussia, Saxony, Schleswig-Holstein, and Württemberg.
The House of Thurn and Taxis, while not a state, transported mail, and in 1852, they also began issuing their own postage stamps.
When the northern German states joined in the North German Confederation in 1868, they discontinued their own postal services and became part of the North German Postal District, or Norddeutscher Postbezirk, in German.
After the German unification and the establishment of the empire in 1871, imperial postage stamps were issued, for use in all but two of the former German states: Bavaria and Württemberg retained their postal authorities and continued to issue their own postage stamps until 1920.
Stamp-Collecting-World has a fantastic collection of pages on the classic stamps of the German States:
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