Conception of the State.
§ 64. A State proper in – contradistinction to colonies and Dominions – is in existence when the people is settled in a country which under its own sovereign Government. The conditions which must be obtained for the existence of a State are therefore four:
There must be, first, be people. A people is an aggregate of individuals of both sexes who live together as a community in spite of the fact that they may belong to different races or creeds, or be of different colour.
There must be, secondly, be a country in which the people has settled down. A wandering people, such as the Jews were whilst in the desert for forty years before their conquest of the Holy Land is not a State. But it matters not whether the country is small or large; it may consist, as in the case of a city States, of a town only.
There must, thirdly, be a Government – that is, one or more persons who are representatives of the people, and rules according to the law of the land. An anarchistic community is not a State  .
There must, fourthly and lastly, be a sovereign Government. Sovereignty is the supreme authority, and authority which is independent of any other earthly authority. Sovereignty in the straight and narrow sense of the term implies, therefore, independence all round, within and without the borders of the country.
International Law by L. Oppenheim, M.A., LL.D. – Vol. I – Peace – page 112-113
2 Salmond, Jurisprudence (7th ed., 1924), p. 145, does not regard a fixed territory as an essential in the theory to the existence of the State. The following writers same view : Gemma, p. 180 : Kelsen, Das Problem der Souveränitäl (1920), pp. 70-76 ; Donati, Stato a territorio (1924), pp. iii, 27, 30, whose view is summarized in Lauterpacht, § 95 (n. 1).