Malaysia took its modern form in 1963 when the former British colony of Singapore and the East Malaysian states of Sabah and Sarawak, joined the Federation of Malaya. This event is marked by Malaysia Day. 

At that time, Kuala Lumpur, the capital of Malaysia was part of the state of Selangor. On January 28th 1974, the Federal Territory of Kuala Lumpur Agreement was signed and four days later, Kuala Lumpur became a federal territory under the control of the federal government. 

In 1984, a second federal territory was created when the government of Sabah state ceded Labuan to the federal government. 

Due to overcrowding in Kuala Lumpur, a new planned city, Putrajaya, was created as the centre for administration of Malaysia. This new city required Selangor to cede more land. The seat of Malaysian government was shifted from Kuala Lumpur to Putrajaya in 1999 and in 2001, Putrajaya became the third federal territory. 

All three federal territories celebrate February 1st as a public holiday to mark the initial formation of Kuala Lumpur as a federal territory.