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According to a graph on wikimedia, and the corresponding wikipedia page merging of municipalities applied to an extreme scale in western germany between 1972 and 1979. Most states had less than 1/3 municipalities they had at the start of the decade. Even the two states who resisted this trend, Schleswig-Holstein & Rheineland/Pflatz, still had a rapid decrease, but only by 20%.
Why did this happen so sudently ?
The reduction was a deliberate policy. It is discussed at some length in section 2 of this paper by Hellmut Wollmann of Humboldt University.
Firstly, there had been huge changes in the settlement structure in post-war Germany, especially after the partition into East and West Germany. The old regional government model was becoming overwhelmed in many areas.
Secondly, regional planning policy was changing to the "Zentralörtliches System". The intent was to create a more efficient and cost-effective system, and this necessitated a smaller number of "central localities".
Finally (and perhaps the strongest driver for the changes) the introduction of the expansive welfare state by the Social Democrats would just have been too unwieldy without a huge reduction in the number of municipalities.