The Channel Islands are an
archipelago in the
English Channel, composed of
Jersey,
Guernsey,
Alderney,
Sark,
Herm,
Brechou,
Jethou and
Lihou; of these, the first four are the principal islands, the others being largely
uninhabited. Located approximately 10-20 miles from the
French coast and 40-50 from the
British. Most Channel Islands residents speak English and French and there is also a local patois, a mixture of English and
Norman French, which is still spoken by some of the older generation, although it is dying out.
The archipelago is comprised of three sovereign states: The Bailiwick of Guernsey, the Bailiwick of Jersey, and Sark. Alderney is part of Guernsey; Sark is technically a part of Guernsey, but is held in fief by the Seigneur, who is a vassal of the English monarch (although the island is so small that it has significant links with the bailiwick).
Each of the states is a dependency of the English Crown, which essentially means that the Crown still plays a part in their constitution, and that there may be feudal dues due to the Crown. The Crown also provides for their foreign affairs and defence. The two bailiwicks are representative democracies, with the English monarch as their head of state, and the Privy Council (Sa majeste en conseil) as their upper chamber and final court of appeal. Their executive is appointed by the crown, typically on the recomendation of the States - their parliament, not the US of A. This means that the Queen, typically by the vote of the Privy Council may refuse to sign any law passed by the parliaments of the bailiwicks into law. Sark is Europe's last feudal state, although where the Seigneur does not reign supreme (even subject to paying his duties to the Crown), with power being held by the local unicameral legislature (including a small elected portion), and the various officers of the crown, as well as officers appointed by the seigneur. (Note the power now allowed to the Prince of Liechtenstein, however). This helps explain why no motor vehicles are allowed there (Except tractors). Each bailiwick issues its own money, stamps, tax regime, etc.; the Guernsey Pound is defined to be the same as the Pound Sterling, and is used throughout the bailiwick, including Sark. Guernsey has its own tld, .gg
The economy of the islands, due to climate, natural resources, and tax regime, are based on agriculture, tourism, financial services, and the national budgets are largely drawn from corporation tax and income tax on foreigners. Each year, the national budgets are in surplus, but the welfare states they offer are appalling, being based on applications for poverty relief to one's parish.
During World War II, the islands were occupied by the Nazis, whose reign was (comparatively) benevolent, to the extent where certain laws remain from that era, signed into law by "Monsieur Le Commandant". Contemporary photographs taken on the islands show images which look almost surreal today: Gestapo officers standing next to a traditional British "bobby" and so on. Although there were only a couple of dozen Jews on the islands at the time of the Nazi invasion, they were treated in the same fashion as Jews in the other Nazi-occupied countries in Europe, although to the Islanders' credit many of them risked their lives to shelter and hide Jews from the SS officers who came looking for them.
Sources: My own knowledge, a bit of web research, and Segnbora-t's and Iain's WU.