This week has seen a flurry of debate and controversy over the nation's history and its symbols. Much of this debate is simply obfuscatory. Of course the Cairo Declaration does not formally give the Republic of China (ROC) sovereignty over Taiwan. Only an international treaty can do that and no treaty since 1951 has -- which is the real reason why the status of Taiwan, as far as the US is concerned, (US Secretary of State Colin Powell take note) -- is "still to be determined."
On the other hand, of course the Allies meant to return Taiwan to China. They said so in Cairo and in Potsdam. And the Japanese agreed that this should be so. Only it was never formalized.
The Chinese Nationalist Party (KMT) government in 1945 was therefore not the legitimate sovereign government of Taiwan, it was the legitimate occupying power until sovereignty could be determined. The illegality of the KMT government was not in its occupation of Taiwan but in its assumption that it was sovereign and in its execrable behavior when it arrived. The current controversy is intimately bound up with the kind of society that was established by this government, especially after its transfer to Taiwan in 1949.
http://www.taipeitimes.com/News/edit/archives/2004/11/15/2003211171Very factual, completely honest... please complete if you want to know exactly what happened in Taiwan and the current lies from America's "moral" Media.