On September 16, 1963, the Federation of Malaysia was proclaimed, joining the Federation of Malaya with the British colonies of Singapore, North Borneo, which became Sabah, and Sarawak. The federation had about 10 million people. Brunei, which had been expected to join, decided not to, and it stayed a British protectorate until 1984.
The idea came from Tunku Abdul Rahman, Malaya's prime minister, and from the British calculation about how to leave. Malaya had been independent since 1957. The Borneo territories and Singapore were not ready, and Singapore in particular had a government the British did not trust, with a strong left wing and a Chinese majority. Merging them was meant to settle both problems at once: the Borneo states would be brought along inside a larger federation, and Singapore would be balanced by territories with a Malay and indigenous majority.
Two neighbours fought it. Indonesia under Sukarno called Malaysia a neocolonial project and ran a low-level confrontation, raids into Sarawak and sabotage in Singapore, from 1963 until 1966. The Philippines claimed Sabah, on the basis of an 1878 agreement with the Sultan of Sulu, and broke off relations. The United Nations sent a mission to Borneo in 1963 to find out whether the people there actually wanted to join, and it concluded that most did.
What broke was the arithmetic. Singapore's People's Action Party, led by Lee Kuan Yew, wanted a Malaysian Malaysia rather than one in which the Malay majority held the federal government permanently. The clashes over that, over revenue, and over race riots in Singapore in 1964, ran for two years. On August 9, 1965, the federal parliament voted to expel Singapore, 126 to nothing, and Singapore became independent.
The rest held. Sabah and Sarawak stayed in, with immigration controls over peninsular Malaysians that they have kept. The federation has been governed since 1957 by the same coalition, under different names, and lost its first general election in 2018. September 16 is Malaysia Day, and it is a public holiday in the country.