hey look, it's another in my series of posts about a semi-imaginary countries!
Nagorno-Karabakh just about makes it onto the list of phantom countries, despite being basically a territory other countries fight over rather than a would-be country in its own right. It lies in the southern Caucasus, and in the late Soviet period it was part of Azerbaijan but had a mainly Armenian population. If my memory is correct, the Soviet republics of Armenia and Azerbaijan started fighting each other over Nagorno-Karabakh even before the Soviet Union broke up. The Armenians triumphed in this struggle, overrunning Nagorno-Karabakh and also the Azerbaijani territory lying between it and Armenia proper.
Looking at Wikipedia, it seems like Nagorno-Karabakh's notional independence is a ploy to allow Armenia to escape the censure that comes from invading a neighbouring country and taking some of their territory. Although Nagorno-Karabakh has its own formal government apparatus, in practice it is completely interlinked with Armenia, and it was Armenian troops fought the war that separated it from Azerbaijan. I suspect that its continued existence is dependent on Armenian arms.
A few years ago, there was the suggestion that the Nagorno-Karabakh dispute was about to reignite. Azerbaijan was reputedly engaged in a military build-up. This was funded by oil revenues that allowed Azerbaijan to spend more on arms than Armenia was spending on everything. For now the threat of this war has been averted, perhaps because the more recent collapse in oil prices leaves Azerbaijan less able to support a bloated military.
Nagorno-Karabakh has a semi-presidential political system. It is a member of the Community for Democracy and Rights of Nations, an organisation of various former Soviet would-be states.