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Source: Flag of Palau

The Flag of Palau was adopted on 1 January 1981, when the island group separated from the United Nations Trust Territory. As with the flags of several other Pacific island groups, light blue is the color used to represent the ocean and the nation's place within it. While this puts Palau in common with the Federated States of Micronesia and other neighboring island groups, the disc on the flag (similar to that on Japan's flag) is off-centre like that of the flag of Bangladesh, but in this case the disc represents the moon instead of the sun. The current flag was introduced in 1981 when Palau became a republic.
Previously, the flag of the Trust Territory of the Pacific Islands was flown jointly with the United Nations and American flags. The explanation for the choice of colors is rooted in the history and customs of the Palauan people. The light blue of the field symbolizes the Pacific Ocean, and also represents the transition from foreign domination to self-government. The golden disk, which sits slightly off-center toward the hoist, represents the full moon. The Palauans consider the full moon to be the optimum time for human activity. At this time of the month, celebrations, fishing, sowing, harvesting, tree-felling, and the carving of traditional canoes are carried out. The moon is a symbol of peace, love, and tranquility.