It was called an "Earth colony", and was said to have "severed relations with the Federation". Sounds like it never was part of the Federation, but merely had relations with it - but this could be a fancy wording for secession, too.
We know the government "fell apart" and gave way to a number of factions infighting in a way that destroyed the single known surface settlement. Two factions were subsequently supported by what remained of the government so that they could act as law enforcers. The original differences of opinion between the two factions were never explicated, but supposedly these would have reflected the differences that originally tore the government apart; presumably, one government faction supported one of the powerful gangs, another supported the other, and ultimately the gangs outgrew the need for an ostensibly joint government.