The Kingdom of Ierendi

Ruler:: King Palfrit and Queen Marianne (as of AC 1000)
Government:: Constitutional monarchy
Capital:: Ierendi
Languages:: Thyatian (common), Makai, Darokinian (especially halflings)

Rumors, Lore and Places of Interest:

The Castle of Ierendi, home of the King and Queen, is constructed of coral harvested from the local reefs. The dominant colors are white, blue and bright orange, and is quite a draw for tourists due to its architectural beauty.
Ierendi has many islands, some of which are parks where tourists may engage in "adventures" which are coordinated (for a fee) by tour guides. Numerous diversions are available for the visiting mainlander.
Ierendi is said to have one of the finest navies in the world, though not the largest. They have been reported to have defeated the Thyatian Navy in the past, and piracy is very low compared to other regions.

History:

Reportedly, Ierendi was founded by criminals and outcasts from the Five Shires about 500 years ago, although the local Makai people will regard this legend with good-natured contempt.

Decades later, the Thyatian Empire established a penal colony on the island group, claiming it for their own in the process. But just 30 years later, the prisoners revolted and drove the Thyatians out. The leader, known as Mad Creeg, named himself King of Ierendi.

Over the centuries, however, the station of King and Queen has ceased to be hereditary. Instead, annual tournaments are held as heroes and adventurers compete in contests for the privilege of wearing the crown for a period of one year. A Tribunal of the heads of various government agencies oversees the games. Thus, the Tribunal holds most of the power in Ierendi.

Notes from the Dungeon Master:

Ierendi is basically a place where nobility, wealthy merchants, and successful heroes often visit to get away from it all. For the most part, it is an island paradise, but where wealth is found, greed and crime can follow.

For more information see GAZ 4: The Kingdom of Ierendi.