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The words Malaysia, Malay and Malaya all derive from Mallai Ur which is Sanskrit for "land of mountains". This was a name given by the Indians to a port town located somewhere between Thailand and Sumatra. The locals came to call it Melayu which the British colonists pronounced as Malaya. From then on, the English referred to the whole area of what is now peninsular Malaysia as Malaya and called its people as Malays. The Malays adopted the name in their own language and continue to call themselves Melayu. The name "Malaysia" was adopted in 1963 when the Federation of Malaya (Malay: Persekutuan Tanah Melayu), Singapore, Sabah and Sarawak formed a 14-state federation. Singapore was expelled from the federation in 1965 and subsequently became an independent country.

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