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By default, your Forecast Hierarchy is equivalent to your Role Hierarchy (in this case, Territory based). What this means is the structure of the Role Hierarchy is exactly the same for the Forecast Hierarchy. As a matter of fact, you cannot add or remove roles from the Forecast Hierarchy screen. It has to be done in the Role Hierarchy.
If you want to delete your existing forecast hierarchy, you should remove the roles in Role Hierarchy and redo it again based on the new hierarchy.
http://theblogreaders.com/salesforce-standard-forecasts-and-customizable-forecasts-overview/#.VUrlkNKqqko
