The Federal Republic of Germany was organized from the initially 12 states formed in the three Western Zones or Allied Zones of occupation held by the United States, the United Kingdom, and France. The city of Bonn was its provisional capital city. The fourth Allied occupation zone or East Zone (Ostzone) was held by the Soviet Union. The parts east of the Oder-Neisse were de facto annexed by the Soviet Union and Communist Poland, the remaining central part around Berlin became the communist German Democratic Republic, GDR (in German: Deutsche Demokratische Republik, DDR) with its de facto capital East Berlin. As a result, the remaining Western Germany had a territory about half the size of its previous democratic-capitalist antecessor, the interwar Weimar Republic.

At the onset of the Cold War, Europe and Germany were divided among the Western and Eastern blocs. Germany was de facto divided into two countries, plus two special territories, the Saarland and divided Berlin. The Federal Republic of Germany claimed an exclusive mandate for all of Germany, considering itself to be the democratically re-organized German Reich on the grounds that the GDR government was not democratically elected, but was installed by a foreign occupying power and thus not legitimate. The number of federal states changed in the 1950s, when three south western states merged to form a single Baden-Württemberg in 1952, and when the Saarland joined the Federal Republic of Germany in 1957. In addition to the official ten states, West Berlin was considered an unofficial de facto eleventh state. While legally not part of the Federal Republic of Germany, as Berlin was under four-power occupation, West Berlin was represented directly or indirectly in federal institutions.

Relations with the Soviet bloc improved during the era of Ostpolitik in the 1970s, and the two German states recognized the existence of each other. De jure West Germany formally maintained the exclusive mandate: it recognized the GDR as a de facto government still within a single German nation that in turn is represented de jure by the West German state only, while East Germany recognized the existence of two German countries de jure, and the West as both de facto and de jure foreign country.

The foundation for the influential position held by Germany today was laid during theWirtschaftswunder (economic miracle) of the 1950s, when West Germany rose from the massive destruction wrought by World War II to become the world's third largest economy. The first chancellor Konrad Adenauer, who remained in office until 1963, had worked for a full alignment with the West rather than neutrality. He not only secured a membership in NATO, but he was also a proponent of agreements that developed into the present-day European Union. When the G6/G8 was established in 1975, there was no question whether the Federal Republic of Germany would be a member as well.

With the collapse of communism in Central and Eastern Europe in 1989, symbolized by the opening of the Berlin Wall, there was a rapid move towards German reunification. East Germany voted to dissolve itself and accede to the Federal Republic in 1990. Its postwar five states (Länder) were reconstituted, and along with reunited Berlin, which ended its special status and formed an additional Land, they formally joined the Federal Republic of Germany on 3 October 1990, raising the number of states from 10 to 16. The expanded Federal Republic of Germany, now exclusively known as simply Germany in the English language, retained its political culture, and it continues the memberships in international organizations, as well as its Western foreign policy alignment and affiliation to Western alliances like the European Union and NATO. The enlarged Federal Republic of Germany is the continuation of, and not a successor to, the (West German) Federal Republic of Germany with fewer states until 1990.

Western Germany (Westdeutschland or westliches Deutschland), where it is not a synonym for "West Germany", is mainly used as a geographic term referring vaguely to the Rhineland, a usage which dates back to before the Cold War. Citizens of the Federal Republic called their country Federal Republic, FR Germany or simply Germany. In the early years, the GDR termed the Federal Republic Westdeutschland, later the FRG (BRD). This abbreviation was strongly disliked by the West Germans as GDR jargon.