Taiwan, then more commonly known to the Western world as "Formosa", became a colony of the Empire of Japan when the Qing Empire lost the First Sino-Japanese War in 1894 and ceded the island with the signing of the 1895 Treaty of Shimonoseki. Japanese rule in Taiwan lasted until the end of World War II.
In November 1943, Chiang Kai-shek took part in the Cairo Conference with Franklin D. Roosevelt and Winston Churchill, who firmly advocated that Japan be required to return all of the territory it had annexed into its empire, including Taiwan and the Penghu Islands. Article 8 of the Potsdam Proclamation, drafted by the United States, United Kingdom, Soviet Union and China in July 1945, reiterated that the provisions of the Cairo Declaration be thoroughly carried out, and the Japanese Instrument of Surrender stated Japan's agreement to the terms of the Potsdam Proclamation.
Under the authorisation of Douglas MacArthur's General Order No. 1, Chen Yi was escorted by George Kerr to Taiwan to accept the Japanese government's surrender as the Chinese delegate. When the Japanese surrendered at the end of World War II, General Rikichi Andō, governor-general of Taiwan and commander-in-chief of all Japanese forces on the island, signed an instrument of surrender and handed it over to General Chen Yi of the Kuomintang (KMT) military to complete the official turnover in Taipei (known previously as Taihoku) on 25 October 1945, at the Taipei City Hall (now Zhongshan Hall). Chen Yi proclaimed that day to be "Taiwan Retrocession Day" and organised the island into the Taiwan Province. Taiwan has since been governed by the Republic of China, and since 1949 has made up most of the country's territory, along with Kinmen, Matsu, Penghu, and other nearby islands; the Republic of China is now frequently referred to as "Taiwan".