Historically, capital cities are a central site from which to control the country as well as a general symbol of unity and patriotism. The word ‘capital’ actually comes from the Latin capitalis, which means ‘of the head.’ A capital city is hence the ‘head’ of the country and tends to be where the heads of state formally reside.
Capitals must represent countries as a whole so they are often located within the centre of their countries, as opposed to on the coast.
Capitals must also remain as neutral as possible and historically have (at times) been chosen as a political compromise. A great example of this is Washington DC, which was chosen as the capital of the US as a compromise between political parties at the time.
The choice of a capital city can also be rooted in political unrest. For example, when the Berlin Wall came down in 1989, there was a massive debate over whether the capital of a united Germany should be Berlin or Bonn. Berlin triumphed and the rest is history, but the decision could have easily swung in the other direction.
Contrarily, South Africa never made it to a decision, so they actually have three capitals – Cape Town, Pretoria and Bloemfontein. Each of their three branches of government is located in one of the cities, so the power is spread evenly among them.
Lastly, the decision of where to place a capital sometimes rests on the decision of one dictatorial leader. This is the case with Astana, Kazakhstan and Nay Pyi Taw, Myanmar.
In the case of Israel, recognising Jerusalem as the capital is a big deal not just because it reverses decades of US policy, but because the status of the holy city has always been one of the biggest hurdles when it comes to negotiating a peace agreement between Israel and Palestine. Time will tell if Trump’s decision on this matter will have any long-term effects.