Palau (pälou´), officially Republic of Palau, independent nation (2005 est. pop. 20,300), c.192 sq mi (497 sq km), W Pacific, in the W Caroline Islands. Belau, the indigenous name for Palau, is sometimes used. Until 1994, Palau was administered by the United States as the last UN trust territory. It consists of about 200 islands and islets, of which Babeldaob (or Babelthuap, the site of Melekeok, the capital), Oreor (or Koror, the former site of the capital), Arakabesan, and Malakal are the most important.
Palauans (about 70% of the population) are predominantly Micronesian with a mix of Malayan and Melanesian strains. There are minorities of Filipinos, Chinese, and other Asians. Palauan is the official language, but English and other languages are also spoken. Roman Catholicism and Protestantism are the predominant religions.
Tourism, subsistence farming, and fishing and shellfishing are the chief economic activities. Machinery and equipment, fuels, and foodstuffs are imported. The United States provides considerable financial assistance under the terms of the compact of free association, and is Palau's largest trading partner, followed by Singapore and Japan.
Palau is governed under the constitution of 1981. The president, who is both head of state and head of government, is elected by popular vote for a four-year term and is eligible for a second term. The bicameral Parliament consists of the nine-seat Senate and the 16-seat House of Delegates; all members are popularly elected for four-year terms. Administratively, the islands are divided into 16 states. Defense is the responsibility of the United States.
Spain held the islands for about 300 years before selling them to Germany in 1899. Japan seized them in 1914 and was given a mandate over them by the League of Nations in 1920. A major Japanese naval base in World War II, Palau was seized by U.S. forces in 1944 and made part of the U.S.-administered United Nations Trust Territory of the Pacific Islands in 1947. Palau became self-governing in 1981. Palau's constitution prohibits nuclear weapons, causing a conflict with the compact of free association proposed by the United States in 1985–86. The islands voted in favor of the compact in 1987, but the referendum failed to garner the 75% of the votes then required. In a new plebiscite held in 1993 the compact was approved, opening the door to closer official linkage with the United States. The following year Palau became an independent nation in free association with the United States. The capital was moved from Oreor to Babeldoab in 2006. In 2010 Palau and the United States signed a 15-year renewal of the financial assistance associated with the compact of free association. Johnson Toribiong was elected president in 2008, succeeding Tommy Remengesau, Jr., who had been elected to the maximum two terms; in 2012 Remengesau defeated Toribiong to return to the office.