The region of Palau was originally settled around 2,500 BC by the ancestors of the Micronesian peoples with later interaction with Malayan and Melanesian groups. Peoples from other racial backgrounds from more recent history are also represented, including Filipino and Chinese.
Contact with Europeans first occurred with the Spanish in 1543. The Spanish soon established sovereignty and governed the territories until the end of the 19th century. The Germans purchased the islands in 1998 from Spain and governed them until 1920, when they were handed over to the Japanese at the end of World War I. The Japanese used the islands as an important naval base in their military campaigns in World War II, until the US and Allied Forces captured the islands with huge loss of life on both sides.
At the end of World War II, the region became known as the United Nations Trust Territories along with nine other nations/collectives within the region, administered by the US. In 1978, Palau proclaimed independence, adopted a constitution and became the Republic of Palau. It was not until 1993 that the terms of the Compact with the US were ratified following contention relating to nuclear weapons.