A federal judge ruled yesterday that the government has failed to properly represent American Indians in a wide variety of legal damage claims, and ordered the Reagan administration to submit legislation or file lawsuits to resolve 17,000 Indian claims dating back as much as a century.

The claims range from the individual case of a Sioux Indian named Henry Rivers, who alleges that his father's land in Eagle Butte, S.D., was improperly lost through a 1935 tax sale, to that of the Covelo Indians of Mendocino County, Calif., whose land was taken without their consent for the construction of what is now California highway 162.

The case involves 17,000 Indian claims arising from alleged trespassing on Indian land, damage to property, denial of ancestral fishing rights, breaches of contract and other improper taking of property or money before 1966.

In many of the claims, the government is responsible for the damages, according to the lawsuit. One set of claims regards money that was improperly taken from Indian estates to reimburse state governments for old age assistance payments. Non-Indians received these payments without paying back anything.

U.S. District Judge Howard Corcoran, ruling here in a class-action lawsuit by Indians against administration officials, found that the government had not obeyed a federal law requiring the United States, as trustee for Indians, to resolve these claims through court suits or legislation. Congress set a deadline of Dec. 31 for the government to file the suits.

After that date, according to the lawsuit, unaddressed claims will be wiped out. Legislation is pending in Congress to extend the deadline, and Indian groups said they hoped the judge's ruling would help its chances of passage.

Corcoran ordered the government to submit legislation to resolve the claims by Dec. 15. For those claims that cannot be addressed in legislation, Corcoran ruled the government must file lawsuits to protect the Indians' rights.

Previous administrations also failed to meet deadlines imposed by Congress, and repeatedly received extensions through legislation. The Reagan administration announced, however, that it would not seek an extension, and would resolve several thousand claims by executive decision -- without lawsuits or legislation.

Indian groups charged that thousands of their members were not notified that their claims were being dropped. They said these Indians would not have time or money to file the claims on their own behalf. They also contended that there are many more claims yet to be identified because the wrongs committed against Indians have been so extensive, and it is difficult to locate descendants.

In a strongly worded ruling, Corcoran wrote that the government's "wholesale disposition of thousands of claims . . . after more than 10 years and countless dollars have been spent identifying and evaluating pre-1966 Indian claims does not comport with the [federal] statute" regarding Indian claims.

Administration officials said the government is considering an appeal. They stressed that the 17,000 cases represent only "potential claims" that may not be valid under closer scruntiny.

Suzan Harjo, an official of the Native American Rights Fund which represented the Indians, called the ruling "a total victory."

"The judge has been most courageous," she said. "This administration was banking on the hope that Indians are poor and powerless and couldn't bring these suits on their own. Now they've been stopped, and I think it's marvelous."