Varosha, officially the Republic of Varosha, is a sovereign city-state and country in south-eastern Europe, bordered by the Mediterranean Sea to the east, and the Republic of Cyprus and Northern Cyprus to the north, south and west. The country's territory is composed of a semi-enclave area surrounded by Northern Cyprus and the Republic of Cyprus, 15 satellite islands and islets, and a exclave within the Demetolos Republic. Land reclamation has grown the area of Varosha since it's declaration of independence.
Originally Varosha was simply a district of the Cypriot city of Famagusta. During the Turkish invasion of Cyprus, the district's citizens, led by Turkish Cypriot Baha Çakmak, decided to defend themselves against the warring Greek Cypriot and Turkish armies. Towards the end of the invasion, the district of Varosha declared independence from Cyprus as a whole, declaring itself a republic city-state with Baha as president and the Greek Cypriot folk singer/peace activist Sakis Stamatopoulos as prime minister.
Varosha, named "a bastion of freedom and democracy on a divided island" by U.S. President Ronald Reagan in 1987, has it's own currency and a well-funded military. It is a unitary parliamentary republic, having been rated a full democracy by the Democracy Index.