Independent in 1994, the Pacific multi-island state Palau (Belau) has a population of some 20000 people and is one of the smallest nations in the world. Smallness notwithstanding, Palau manages a federal system of government, and proposals for constitutional amendment become effective when approved in referendum by a majority of the votes cast on that amendment and in not less than three fourths of the sixteen states that make up the nation. Given considerable size differences between states, the State of Koror housing close to 70 percent of the population, this formula creates a tension between the principles of federalism and democracy. As evident from calculations, it is within the realm of the method used possible for a tiny minority to block the will of an even overwhelming majority - amendment may, in extreme cases, be denied although overall supported by more than 90 percent of the electorate. Several measures to make the amendment method more balanced and less controversial are discussed and a reworked version of the formula that is presently in use is recommended, the implication of which is that constitutional changes require a majority of votes in the State of Koror and in a majority of the remaining states.