Taiwan ROC is a separate country of China PRC.
In a way they are similar to Scotland and the UK but not quiet the same. The government of what is now China forcibly took over control of the country during the end of WWII when what was the current government (the ROC) was busy fighting the Japanese and internal strife. When the CCP (later known as the PRC) took control of the capital the ROC government packed up and retreated to the island of Taiwan with hopes of staging a counter offensive from the island. However the time it took for them to regroup and reorganize the government and military the CCP had already claimed control over the mainland. Sine the CCP wanted total control with no chance of rebellion the continued their attacks against the ROC and the ROC who wanted to reclaim the mainland fought back with them in open military combat. Until 1966 when the US President sent the biggest U.S. envoy of American naval power in Asia since the Vietnam War to prevent the Chinese from using their "military exercises" in the ocean near Taiwan (on the eve of the country's first free presidential elections) as a means of attacking Taiwan. After that the PRC started using political and economic situations to fight the ROC in to submission.
Until Richard Nixon's presidency the United States supported and openly backed the ROC Taiwan, but because of his political ambitions Nixon denounced the ROC as a government which lead to the end diplomatic ties with them. Since the US which was Taiwan's original main supporter has diplomatically turned its back on them, the PRC has used it as a means to make such wild claims of owner ship to Taiwan and state their "One-China Policy"
Does it have its own government and army? Yes, Taiwan does have its own independently democratically elected government and an independent military consisting of ARMY, NAVY, and AIR FORCE. The current Taiwan government has 2 major political houses one the Pan Green and the other the Pan Blue. These 2 houses are separated into different parties, the KMT (Kuomintang the original ruling party of the ROC), and the DPP (Democratic Progressive party) are the major parties, the People First Party (PFP), the New Party (NP) and Non-Partisan Solidarity Union (NPSU) Chinese People's Party, Peasant Party, Civil Party, Green Party Taiwan are minor parties. The Pan-Blue side usually has more tendencies to lean towards unifying with the PRC, and the Pan-Green is more independence Taiwan and peaceful bilateral relations with China.
The current political relations between Taiwan and China are varied. Depending on which political party is in power in Taiwan they range from complete independence from China with only economic ties, to more friendly ties with what seems to be a forced sell out to China with the current president Ma.
But the general stand is that Taiwan and China are 2 countries and they are hashing out a bilateral agreement that is beneficial to both countries and for Taiwan does not involve them being occupied by or governed over by the PRC.
Is there a chance for war between Taiwan and China. The possibility does exist if the right/wrong person comes to power in China and/or the US, and the current economic trend continues to weakens the US, who signed a Mutual Defense Treaty with the ROC promising protection from the U.S. for Taiwan, to the point that we are not able to fulfill our promise. I could see the PRC using that as an opportunity to attack Taiwan. However the currently visible trend would say that the chances for war are not likely, but with China's next president coming in power in 2012 it is hard to say what will actually happen.
For people such as ST who claim that Taiwan belongs to the PRC China in any way or form I would to see REAL FACTUAL evidence that is NOT just what the Communist Party leaders say. I would really like to see information that supports their claims that Taiwan belongs to China other than the PRC's self claimed One China policy that they forced the rest of the world to follow.
ST says that Taiwan can't be a nation because it is a de facto nation, well that may be true since the PRC will not allow the other nations to accept it as a de jure nation. However De facto or De jure, Taiwan ROC is a nation, in the sense that it meets every qualification of a nation and has done so since its creation. A state as a person of international law should possess the following qualifications: (a) a permanent population; (b) a defined territory; (c) government; and (d) capacity to enter into relations with the other states. The political existence of the state is independent of recognition by the other states.
De jure, or legal, sovereignty is the theoretical right to exercise exclusive control over one's subjects.
De facto, or actual, sovereignty is concerned with whether control in fact exists. It can be approached in two ways:
Does the governing power have sufficient strength (police, etc.) to compel its subjects to obey it? (If so, a type of de facto sovereignty called coercive sovereignty exists.)
Are the subjects of the governing power in the habit of obeying it?
It is generally held that sovereignty requires not only the legal right to exercise power, but the actual exercise of such power. That is, "No de jure sovereignty without de facto sovereignty." In other words, neither claiming/being proclaimed Sovereign, nor merely exercising the power of a Sovereign is sufficient; sovereignty requires both elements.
http://en.wikipedia.org/wiki/Montevideo_Convention#Micronations
http://en.wikipedia.org/wiki/Sovereignty#De_jure_and_de_facto