Due to early contacts between the South Indian and Malay kingdoms, the name Malaya is a combination of two Tamil words, Malay or Malai (hill) and ur (town) meaning hilltown” (Malaiyur). According to Dr. Thriunavukkarasu the word Malaysia means the Mountains of Asia.[1] Peninsular Malaysia is also known as West Malaysia (Malaysia Barat) or Malaya (Tanah Melayu). The term Peninsular Malaysia is used more often than West Malaysia (to avoid the idea that West and East Malaysia are separate countries like West Germany and East Germany used to be until 1990), or Malaya (which is now becoming obsolete due to its connotations of the British colonial era). Nonetheless, all three terms are correct, and the older term Malaya can still be found in many institutional titles, e.g. the High Court of Malaya, the University of Malaya, Malayan Railway, etc., as well as in legal contexts in the phrase the States of Malaya (Negeri-negeri Tanah Melayu), which should not be confused with the Malay states. Note that until 1946, the term Malaya usually included Singapore.
Brief History: The British signed treaties of protection with Malay rulers from 1874 to 1930. In 1896 some of these states were grouped together as the federated Malay States. Malaya was occupied by the Japanese from 1942 to 1945. All the Malay states, together with the Straights Settlements except for Singapore, were incorporated into a new federation in 1948. This was the basis on which Malaya achieved independence in 1957. In 1963 Malaya joined with Singapore (which seceded in 1965), North Borneo, and Sarawak to form Malaysia.
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