I am trying to establish some background to this decision. Were these 3 counties primarily Catholic in population or are there other reasons behind the decision?
The Government of Ireland Act 1920 was the end result of over 40 years of failed constitutional attempts to bring Home Rule to Ireland. The initial Home Rule bills of the late 19th century applied to all of Ireland - all 32 counties. When these bills failed to pass in Westminster Parliament because of lack of support from the English Conservative Party [they had Liberal support] Conservatives developed the idea that Ireland could be partitioned with the northern section given its own parliament. At first this was rejected on all sides in Ireland. Neither Protestant or Catholic wanted partition. Behind closed doors Winston Churchill admitted that partition of Ireland was seriously on the agenda for the Conservative Party from at least 1909. By 1914 this had become acceptable to northern Unionists as a way of keeping them within the United Kingdom and protecting their superior economic position over the Ulster Catholic population, which they been privileged to enjoy under British rule.
The Home Rule bill of 1914 passed but with a provision to keep part of Ulster separate from a Dublin parliament. No final decision was made at that time on how many counties this would apply to. If taken as whole, Ulster was majority Catholic so this would challenge the permanent existence of an exclusion of Ulster. The Act was put aside as WWI loomed.
In 1916 nationalists held a Rising against British rule and against the idea of a divided Ireland. The insurrection was put down but the political party Sinn Féin ran for the General Election in 1918 on the issue of Irish independence - secession - and won 73 out of a possible 103 seats. They then declared Irish independence and founded a parliament in Dublin which they called Dáil Éireann - the origin of today's Dublin parliament. War broke out when the British refused to recognise this Parliament and sent in British troops to break it up. Black and Tans [essentially state terrorists] followed and a bloody war of independence was under way.
In the midst of all this in 1920 the 1914 home rule bill was put to a Westminster vote and partition became a reality as six of the nine Ulster counties were held within the UK. Only 4 of the Ulster counties were majority Protestant/Unionist but the economic viability of these 4 would be a challenge to their survival so 2 majority Catholic counties [Fermanagh and Tyrone] were also included. Most importantly this also ensured a permanent Protestant majority within the six chosen counties. When the Irish War of Independence ended with the Anglo-Irish Treaty in Dec of 1921 partition was cemented into the Treaty agreement.
Discrimination against Catholics - a way of life since the Plantation of Ulster in the early 1600s - became politically and socially established within the six county region. Even prior to the act being passed Catholics were expelled from one of the major employers in the city of Belfast, Harland and Wolffe. This was mainly the work of the Belfast Protestant Association who called on Protestant and Unionist workers to drive out Catholic workers. This was soon followed by expulsions from other major employers in the city, Musgraves, Mackies Foundry and several linen mills. Riots began and approximately 18 people were killed. Hundreds of mainly Catholic families were driven from their homes. Little was done to help the situation and Northern Ireland settled into a situation where Catholics found themselves to be second class citizens. Employment, housing and voting rights were denied to them. Careful gerrymandering made the Catholic vote impotent even in the counties that were majority Catholic counties.
Further reading: A History of Ulster. Jonathan Bardon.