It was founded by English-educated intellectuals and advocated for the independence of British Malaya as a single entity inclusive of Singapore.
There exists differing accounts of the party's origins, although it is generally accepted that it was first conceived by its leaders while under Japanese internment in occupied Malaya.
[2] The party adopted a moderate and liberal attitude at its inception and called for, among other things, a self-governing democratic Malaya within the British Commonwealth.
In opposition to the Anglo-Malay constitution, the Malayan Democratic Union alongside other parties and organisations formed the All-Malaya Council of Joint Action (AMCJA), which styled itself the sole representative body of "domiciled Malays and non-Malays", and sought to engage in direct negotiations with the British government for a more democratic constitution.
The party was voluntarily dissolved in June 1948 at the beginning of the Malayan Emergency, when its leaders heard rumours that the colonial government was considering taking action against it.