In August 2013 the Province of Stone Fist Valley seceeded from Happy Nation, forming the Grimshire Socialist Republic. The Council remained the same, but the Happy Nation Parliament was established to govern the larger state. Now moved to the PC, Happy City became Happy Nation. In reality, another save corruption resulted in the loss of six months of work. At this point, the area is still quarantined by the HCDF PCU (Plauge Containment Unit). The result was the monsters of minecraft finishing off the dying urban center. The city remained populated, but in the grip of riots, until December 3, 2003, when at 2300 local time, the power failed. With the exception of two Quarantine Zones in the Shadow Hills and Leetland areas, the entire area was abanded by the remnants of the government, who took as many healthy people as possible with them. The result was the abandoning of the entire area. After this, HCDF Quarantine efforts eventually proved futile, as the plauge spread. Near dead by the time he reached Happy City, he chrashed into the Residential District. After an accident resulted in the release of ID 609 in the lab, a supply helicopter pilot escaped before HCDF fighters arrived to establish a no fly zone.
The disease, a mutated rhino virus given the serial number ID 609 (Infectious Disease 609), was a lethal version of the common cold, maintaining all the cold's mutation and transmission abilities. an HCDF containment team removed the survivors to the Menagerie Island Infectious Disease Center for study. After admitance to the Arthur Eggelbrecht Military Hospital, they, and almost everone on the base, were killed. In October of 2003 a Happy City University archeological expedition contracted a mysterious disease with cold like symtoms. There it remained, eclipsing the old Castle Miner city by an enourmous degree.
Upon the release of the Xbox 360 Edition on May 9th, 2012, the City officially moved to the new platform. At about this point a massive save corruption devestated the City, and the council ordered it abandoned. Happy City consisted of three districts, along with the Taj Peak Detention Facility, Chuckles Air Force Base, and a small outpost. This military was dubbed the Happy City Defense Force, or HCDF. After the secession of the protectorate of Maricoba and that protectorate becoming the militaristic city-state of Lava City, the council authorized the creation of a military. The government consisted exclusively of the three seat Happy City Council. Happy City was founded in January of 2011 on the Xbox 360 arcade game Castle Miner Z, and was at that point a small city-state.
When Happy City expanded into the infinite PC Minecraft world, it was renamed Happy Nation and the govenment slightly reorganized. This provided the inspiration for Happy City. The name Happy Nation originated from a long, boring session playing the game Dead Island, in which a gas station dubbed "Happy Town" was defended.