– The celebration of Shushan Purim was instituted in connection with Eretz Yisrael. Our Sages decreed that Shushan Purim be celebrated in the cities that were surrounded by walls at the time of Yehoshua’s entrance into the Land of Israel in the year 2488.
In this manner, they “paid respect to Eretz Yisrael”, giving its walled cities the honour given to Shushan, even though they were destroyed at the time of the Purim miracle.
Nevertheless, the name of the holiday is connected, not with the cities of Eretz Yisrael, but with a city in the Diaspora, and furthermore, the capital city of Achashverosh, king of Persia (and thus the capital of the entire civilized world of that time). Even if originally the holiday was instituted because of the events in Shushan, the name could have been changed afterwards.
The use of this name, however, reflects the completion of the Jews’ task of refining the material environment of the world.
There are several levels in the fulfillment of this task. For example, the transformation of mundane worldly things to articles of holiness. On a deeper level, there is the transformation of influences which previously opposed holiness into holiness. The latter process often involves several phases and occasionally, there is an interruption between them. The most complete expression of the task of refinement is when this process of transformation takes place immediately, without interruption.
We see a parallel in the service of teshuvah, which is not a step by step process of ascent, but rather a radical jump. Similarly, the exodus from Egypt involved such a radical leap, and thus our Sages borrowed the verse “leaping on the mountains, springing on the hills” to describe that redemption.
Similarly, in regard to the matter at hand, Shushan Purim shows how Achashverosh’s capital was transformed into a positive influence, indeed, an influence so great that it is connected with the celebration of Purim in the walled cities of Eretz Yisrael.
From the Rebbe’s talk on the Eve of Shushan Purim Katan, 5752(1992).