The people of Cyprus are broadly divided into two main ethnic communities, Greek Cypriots and Turkish Cypriots, who share many cultural traits but maintain distinct identities based on ethnicity, religion, language, and close ties with their respective motherlands. Before the dispute started in 1964 the peoples of Cyprus (then 77% Greek Cypriots, 18% Turkish Cypriots, 5% other communities, including Armenians and Maronite’s) were dispersed over the entire island.

The Turkish invasion of Cyprus in 1974 de facto partitioned the island into two political areas: 99.5% of Greek Cypriots now live in the Republic of Cyprus while 98.7% of Turkish Cypriots live in Northern Cyprus (of other nationalities, 99.2% live in the Greek Cypriot area in the south). Greek is predominantly spoken in the South, where the majority are Greek Cypriots, Turkish in the north, where the majority are Turkish Cypriots. English is widely used over the entire island.

The total population of Cyprus as of the end of 2006 is slightly over 1 million, comprising 789,300 in the territory controlled by the government of the Republic of Cyprus and 294,406 in Northern Cyprus. The population of Northern Cyprus includes some 150,000–160,000 Turkish immigrants who are regarded as illegal settlers by the Republic of Cyprus government and are not included in the population statistics of the Republic of Cyprus Statistical Service.

Large-scale demographic changes have been caused since 1964 by the movements of peoples across the island and the later influx of settlers from Turkey to Northern Cyprus. According to the 2011 Census, there are 170,383 non-citizens living in Cyprus, of whom 106,270 are EU citizens and 64,113 are from third countries. The largest EU groups by nationality are Greeks (29,321), British (24,046), Romanians (23,706) and Bulgarians (18,536). The largest non-EU groups are Filipinos (9,413), Russians (8,164), Sri Lankans (7,269) and Vietnamese (7,028). There are an estimated 20–25,000 undocumented migrants from third countries also living in the Republic, though migrant rights groups dispute these figures. The demographic changes in society have led to some racist incidents, and the formation of the charity KISA in response.

The demographic character of Northern Cyprus changed after the Turkish invasion in 1974 and especially during the last 10–15 years. The TRNC census carried out in April 2006 showed that out of a total population of 256,644 in Northern Cyprus, 132,635, or 52%, were Turkish Cypriots in the sense that they were born in Cyprus of at least one Cyprus-born parent (for 120,007 of these both parents were Cyprus-born). In addition, 43,062 TRNC citizens (17%) had at least one non-Cypriot Turkish-born parent, 2,334 TRNC citizens (1%) had parents born in other countries, 70,525 residents (27%) had Turkish citizenship, and 8,088 (3%) were citizens of other countries (mainly UK, Bulgaria, and Iran).

Based on these census data, it is estimated that 113,687 TRNC residents, or 44% of the population, are not Turkish Cypriots properly speaking, but are in fact "Turkish immigrants" or "Turkish settlers" from Anatolia. Alternative sources suggest that there are 146,122 Turkish settlers from Anatolia in TRNC (2007 figures) and that the Turkish Cypriots in Northern Cyprus are today outnumbered by the  Turkish settlers, contrary to the picture presented by the 2006 TRNC census.

Almost one-third of the Turkish settlers in Northern Cyprus has been granted TRNC citizenship by the authorities of Northern Cyprus and has thus been naturalized. The Republic of Cyprus regards settlement in Northern Cyprus, especially if accompanied by naturalization, as a violation of the Geneva Conventions Protocol of 1977, since the Turkish occupation has been declared illegal by the UN. It, therefore, considers these Turkish immigrants to be "illegal settlers" and does not include them in the population estimates for the entire island published by the Republic of Cyprus Statistical Service.

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