[rplst8]

I think this was a feature of NTFS over FAT32 - not an OS level feature. XP was the first home oriented OS to support NTFS natively.

[brassic]

When NTFS was first released Microsoft claimed it was so awesome it didn't need defragging. In later releases of Windows NT they added a defragger. By around the time of XP this was automatically scheduled to run in the background.

tldr: NTFS does a better job of avoiding fragmentation than FAT, but both need defragging.