In that year they formed the Malayan Union together with two of the former Straits Settlements, (Malacca and Penang), and the Unfederated Malay States.

Two years later, the union became the Federation of Malaya, which achieved independence in 1957, and finally Malaysia in 1963 with the inclusion of North Borneo (present-day Sabah), Sarawak and Singapore.

The federation, along with the Unfederated Malay States of the peninsula and the Straits Settlements, was overrun and occupied by the Japanese during World War II.

On 20 January 1874, Sir Andrew Clarke, governor of the Straits Settlements, concluded with the Sultan of Perak the treaty of Pangkor whereby the Sultan agreed to "receive and provide a suitable residence for a British Officer to be called Resident, who shall be accredited to his court, and whose advice must be asked and acted upon on all questions other than those touching Malay Religion and Customs".

This structure was highly centralized, with real power resting in the hands of the agents of the British Government, at first called the Resident-General, and later the Chief Secretary.

It was headed by the High Commissioner (The Governor of the Straits Settlement), assisted by the Resident-General, the rulers, the four state Residents and four nominated unofficial members.

The flag of the Federated Malay States consisted of four different-coloured stripes, from top to bottom: white, red, yellow and black.

The National History Museum located near the Dataran Merdeka in Kuala Lumpur, Malaysia has a replica of the federation's flag.

A banner with the phrase "Dipelihara Allah" (Under God's Protection) written in Jawi is located underneath the shield.

This design forms the basis of the Federation of Malaya's national emblem along with the guardian tigers and a quartered shield of the same, symbolic four colours mentioned above.

The council discussed matters of interest for each respective state such as legislative and administrative issues as well as revision of all sentence of capital punishment.

The Federated Malay States main economic activities were agriculture and mining with emphasis on rubber and tin.

This period also saw rapid growth in terms of communications infrastructure such as interstate roads, the expansion of the Federated Malay States Railways' narrow-gauge railway line between the Padang Besar and Singapore, and Port Swettenham (present-day Port Klang).

Public buildings were also constructed such as the Kuala Lumpur railway station, the Government Offices of the FMS and Masjid Jamek.

Of this latter sum $3,195,318 was derived from duty on exported tin, $1,972,628 from finance, federal receipts, and $340,360 from land revenue.

The trade balance was chiefly derived from the revenue farms, which included the right to collect import duty on opium and spirits.

The remainder is mainly derived from the revenue farms, which are leased for a short term of years, conveying to the lessee the right to collect import duties upon opium, wine and spirits, to keep pawnbroking shops, and to keep public licensed gambling-houses for the use of non-Malay only.

The value of the imports into Perak during 1905 was over $20,000,000, and that of the exports exceeded $40,000,000, making a total of over $60,000,000, equivalent to about seven million sterling.

The mining population was recruited exclusively from the districts of southern China, and during certain years an increased demand for labourers in China itself, in French Indo-China, in the Dutch colonies, and in South Africa temporarily and adversely affected immigration to the Straits of Malacca.

Excluding tin, the principal exports were $108,000 worth of Para rubber, $181,000 of copra, $54,000 of hides, $48,000 of patchouli, and considerable quantities of timber, rattans and other jungle produce.

Pahang is still a source of expense to the federation, its progress having been slowed by the disturbances which lasted from December 1891 until 1895, with short intervals of peace, but the revenue was steadily increasing, and the ultimate financial success of the state is considered to be secure.

Kuantan, in the eastern component state of Pahang, fell on 30 December 1941, meanwhile the capital, Kuala Lipis was taken by the Japanese on 7 January 1942.