Palau officially the Republic of Palau is an island country located in the western Pacific Ocean. The country contains approximately 340 islands, forming the western chain of the Caroline Islands in Micronesia, and has an area of 466 square kilometers (180 sq mi). The most populous island is Koror. The capital Ngerulmud is located on the nearby island of Babeldaob, in Melekeok State. Palau shares maritime boundaries with the Philippines, Indonesia, and the Federated States of Micronesia.
The country was originally settled approximately 3,000 years ago by migrants from Insular Southeast Asia. The islands were first explored by Europeans in the 16th century, and were made part of the Spanish East Indies in 1574. Following Spain's defeat in the Spanish–American War in 1898, the islands were sold to Imperial Germany in 1899 under the terms of the German–Spanish Treaty, where they were administered as part of German New Guinea. After World War I the islands were made a part of the Japanese-ruled South Pacific Mandate by the League of Nations. During World War II.
Skirmishes, including the major Battle of Peleliu, were fought between American and Japanese troops as part of the Mariana and Palau Islands campaign. Along with other Pacific Islands, Palau was made a part of the United States-governed Trust Territory of the Pacific Islands in 1947. Having voted against joining the Federated States of Micronesia in 1979, the islands gained full sovereignty in 1994 under a Compact of Free Association with the United States.
Politically, Palau is a presidential republic in free association with the United States, which provides defense, funding, and access to social services. Legislative power is concentrated in the bicameral Palau National Congress. Palau's economy is based mainly on tourism, subsistence agriculture and fishing, with a significant portion of gross national product (GNP) derived from foreign aid. The country uses the United States dollar as its currency. The islands' culture mixes Micronesian, Melanesian, Asian, and Western elements. Ethnic Palauans, the majority of the population, are of mixed Micronesian, Melanesian, and Austronesian descent. A smaller proportion of the population is descended from Japanese. The country's two official languages are Palauan (a member of the Austronesian language family) and English, with Japanese, Sonsorolese, and Tobian recognized as regional languages.