The Netherlands is a constituent country of the Kingdom of the Netherlands, consisting of twelve provinces in western Europe and three islands in the Caribbean. The European part of the Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east; and shares maritime borders with Belgium, Germany and the United Kingdom. Its territory Sint Maarten borders France in the Caribbean via France's territory Saint Martin. The country is a parliamentary democracy organised as a unitary state. The capital city of the Netherlands, mandated by the constitution, is Amsterdam, however, the seat of government is located in The Hague. The Netherlands in its entirety is often referred to as Holland, which in strict usage, refers only to North and South Holland, two of its provinces; however the former usage is generally accepted.
The Netherlands is a geographically low-lying country, with about 20% of its area and 21% of its population located below sea level, and 50% of its land lying less than one metre above sea level. This distinct feature contributes to the country's name: in Dutch (Nederland), English, and in many other European languages, its name literally means "Low Land" or "Low Countries." Most of the areas below sea level are man-made, caused by centuries of extensive and poorly controlled peat extraction, lowering the surface by several metres. Even in flooded areas peat extraction continued through turf dredging. From the late 16th century land reclamation started and large polder areas are now preserved through elaborate drainage systems with dikes, canals and pumping stations. Much of the Netherlands is formed by the estuary of three important European rivers, which together with their distributaries form the Rhine–Meuse–Scheldt delta. Most of the country is very flat, with the exception of foothills in the far south-east and several low hill ranges in the central parts.
The Netherlands was one of the first countries to have an elected parliament, and the country is a founding member of the EU, G-10, NATO, OECD, WTO and a part of the trilateral Benelux economic union. The Netherlands had the tenth-highest per capita income in the world in 2011. The country is host to the Organisation for the Prohibition of Chemical Weapons and five international courts: the Permanent Court of Arbitration, the International Court of Justice, the International Criminal Tribunal for the Former Yugoslavia, the International Criminal Court and the Special Tribunal for Lebanon. The first four are situated in The Hague, as is the EU's criminal intelligence agency Europol and judicial co-operation agency Eurojust. This has led to the city being dubbed "the world's legal capital". The Netherlands has a market-based mixed economy, ranking 17th of 177 countries according to the Index of Economic Freedom. In May 2011, the Netherlands was ranked as the "happiest" country according to results published by the OECD.