My series on anomalous and unrecognised countries returns!
The full name of this phantom country is the Turkish Republic of Northern Cyprus. As that suggests, Northern Cyprus lies along the northern edge of Cyprus, and it is inhabited by people who have a Turkish ethnic identity. Turkey is the only country that recognises its independence. This is not entirely coincidental. Northern Cyprus was established on the territory seized from the rest of Cyprus by the Turkish army in 1974.
Cyprus had previously become independent from Britain as a unified state. Ethnic Greeks formed a substantial majority. Relations between them and the Turkish Cypriot minority were often tense. In coup brought a right-wing clique to power in Cyprus. They were committed to unifying Cyprus with the rest of Greece, then also ruled by an ultra-nationalist right-wing dictatorship. The prospects for Cypriot Turks would then have been rather poor. In response, Turkey launched an invasion of the island. Resistance was easily crushed, with the Turkish army establishing control of what subsequently became Northern Cyprus.
My understanding is that the invasion triggered a bout of ethnic cleansing. All (or almost all) Greek Cypriots were expelled from the northern zone, with almost all Turkish Cypriots moving north (freely or under duress) from the territory retained by the Republic of Cyprus. The Turkish Republic of Northern Cyprus was formally established in the early 1980s.
For many years after the Turkish invasion, the island of Cyprus was divided by a no-man's land patrolled by UN troops, with the capital city of Nicosia divided by a mini-Berlin Wall. The restrictions on movements between the two parts of the island have eased in recent years. Nevertheless, without the ongoing support of Turkey (which maintains a sizeable military presence on the island), Northern Cyprus would not be able to resist reabsorption into the Republic of Cyprus.
Northern Cyprus is an odd and ambiguous place, even by the standards of phantom countries. It is largely unrecognised as a state, yet it seems to have a certain tacit recognition as a de facto player in the drama of Cypriot politics (not least from the internationally recognised Republic of Cyprus, whose leaders negotiate directly with their Northern Cypriot counterparts). The region nevertheless looks unlikely to gain widespread recognition as an independent state. This does not seem to even be a key goal of the Northern Cypriot leaders - they seem to be seeking not so much wider recognition for their "state", but its dissolution. Their goal is to unify Cyprus as a confederal state, with Northern Cyprus and the internationally recognised Republic of Cyprus as sub-units. The motor for this lack of interest in Northern Cypriot nationalism is economic – Northern Cyprus has stagnated since the island was partitioned, while the internationally recognised Republic of Cyprus has motored ahead.
In 2004 it seemed as though the conflict on Cyprus was about to be resolved. Under EU & UN auspices, the leaders of the two Cypriot entities had agreed a deal that would have seen the island reunited as a decentralised state comprising two subunits. The deal failed because southern Cypriot leaders developed second thoughts and successfully urged their compatriots to reject the deal in a referendum. The EU was caught on the hop by this unexpected outcome, as southern Cyprus had been allowed to accede to the European Union regardless of the outcome of the referendum. That allows southern Cyprus to block or disrupt EU engagement with either Turkey or Northern Cyprus.
So where now lies the future for Northern Cyprus and the rest of the island? The likelihood must be that eventually some kind of deal is done that is acceptable to both parts of the island, and this will lead to the establishment of a bi-national state with Greek and Turkish sub-units. One odd thing about all this is that this is likely to be an apartheid solution, with the Greek and Turkish Cypriot populations remaining in their ethnically homogenous regions. Northern Cyprus will probably surrender substantial territories to the Greek Cypriot zone, reflecting the relative imbalance in power, wealth, and population between the two communities.
Politically, Northern Cyprus seems to be a functional representative democracy. It has semi-presidential constitution, with the president exercising more power than the prime minister.
As an aside, Northern Cyprus is one of the more readily visit able phantom countries. One can fly there, albeit with a stopover in Turkey, and my understanding is that one can now cross from the Republic of Cyprus to the TRNC. I believe Northern Cyprus to have a reasonably developed tourist infrastructure and a surprising number of sites of interest to the discerning traveller.
EDIT: see comments for fascinating semi-presidentialism related chit chat.