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Established in 2164, Proxima III became one of the Earth Alliance's leading industrial producers with many human interstellar corporations placing their main offices in the Proxima colony, particularly those that operate orbital construction facilities. Proxima III's relatively empty orbital trajectories was the main draw for this kind of business early on, a move that proved profitable for several companies.
It has its own transfer station which deals with customs, security and cargo for the planet. The planet has its own jump gate at one of its Lagrange points for interstellar travel for its citizens and visitors.
In 2260 the planet broke away from the Earth Alliance in protest of the bombing of civilian targets on Mars. It, along with Orion VII and space station Babylon 5, set itself up as an independent state until President Morgan Clark was removed from office. 
By September of 2261 the colony had been invaded by Earth Alliance soldiers and its jump gate was blockaded by Destroyers to prevent civilians escaping. The colony was close to surrendering as food, water and medical supplies were all running dry, until Sheridan and a detachment of White Stars broke the blockade and forced the surviving combatants to surrender during the Battle of Proxima III.  It later rejoined Earth Alliance.