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The Coalition was proposed by Nathan Samuels, the Prime Minister of United Earth, in late 2155, in an effort to build upon the work of UE Starfleet Captain Jonathan Archer of Enterprise NX-01 in organizing a joint military operation amongst these powers to thwart a Romulan Star Empire plot to ignite interstellar war. This was a month after Terra Prime's attempt to isolate Earth from allied species. (ENT episodes: "Demons", "Terra Prime", ST reference: Federation: The First 150 Years)
The People's Republic of Coridan had also intended to join the Coalition; however the government of that world decided not to do so after a Romulan attack that devastated Coridan Prime and killed half a billion people. That attack also persuaded the United Rigel Worlds and Colonies to back out of joining.
The Coalition Compact was finalized and signed in March of 2155, with Prime Minister Samuels as one of the signatories. The Coalition of Planets proved to be one of the most vital steps leading to the formation of the United Federation of Planets in 2161. (ENT novel: The Good That Men Do)
Following a Romulan attack on Draylax in July 2155, the Alpha Centauri Concordium and Draylax simultaneously joined the Coalition. Vulcan, Andoria, and Tellar feared that admitting Alpha Centauri would give Humans too much power in the alliance, and only allowed its admittance on the condition of Draylax also becoming a member, strengthening non-Human membership.
The Coalition of Planets made its decisions through the Coalition of Planets Security Council, comprised of the authorized representatives of each member state's government. The Coalition Security Council was based out of the United Earth capital of San Francisco on Earth. In 2155, the United Earth Prime Minister and Interior Minister often represented Earth, whilst the various foreign ambassadors to Earth often served double-duty as the representatives of their worlds to the Coalition. When the Vulcan and Andorian Ambassadors to United Earth, Soval and Anlenthoris ch'Vhendreni, each received a promotion to the position of their respective states' Foreign Ministers, each continued to represent their worlds on the Coalition Security Council ex officio.
The utility of the Coalition of Planets was placed in question early in its life upon the Romulan crisis that immediately precipitated the Earth-Romulan War in 2155. The members of the Coalition had extreme difficulty agreeing to a common response to the Romulan attacks, with Andor and Tellar believing false evidence of Klingon attacks even as Earth and Vulcan advised on the need for more information. Upon the attacks on Draylax, Alpha Centauri, and Colran, the Coalition of Planets recommended that its members declare war in July 2155. (ENT novel: Kobayashi Maru)
In an alternate timeline, the Coalition of Planets negotiations failed after Terra Prime's attack succeeded in keeping Earth out. The negotiations would be continued on Babel leading to the formation of the Interstellar Coalition. (Star Trek: Myriad Universes novel: A Less Perfect Union)