Palau is an island country located in the western Pacific Ocean. Geographically part of the larger island group of Micronesia, with the country's population of around 21,000 people spread out over 250 islands forming the western chain of the Caroline Islands.
The islands share maritime boundaries with Indonesia, the Philippines, and the Federated States of Micronesia. The most populous island in the group is Koror, with the capital city, Ngerulmud, located on nearby Babeldaob.
The country was originally settled around 3,000 years ago by migrants from the Philippines, with a Negrito population sustained until around 900 years ago. The islands were first visited by Europeans in the 18th century, and were made part of the Spanish East Indies in 1885. 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. The Imperial Japanese Navy conquered Palau during World War I, and the islands were later 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 newly-independent 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, with the US providing 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's currency is the United States dollar. The islands' culture is derived from a mixture of Japanese, Micronesian, and Melanesian elements, with the majority of citizens of mixed Micronesian, Melanesian, and Austronesian descent, with significant groups descended from Japanese and Filipino settlers. The country's two official languages are Palauan, a member of the wider Sunda–Sulawesi language group, and English, with Japanese, Sonsorolese, and Tobian recognised as regional languages.