That depends on who you ask, like I said. Officially Taiwan isn't sovereign.
The US doesn't control Taiwan. It "protects" Taiwan but the Taiwanese government rules Taiwan. They control Taiwan's exports, Taiwan's currency, immigration into Taiwan. They make the laws that govern Taiwan.
Palestine has no currency, doesn't control immigration into itself, and cannot control its exports. It's also divided into two 'states' at the moment.
The only reason Taiwan isn't recognized is because of China.* Israel and the US don't want Palestine recognized, but there are other reasons as to why it's not an actual state (yet).
*and because they claimed they were China for a long time.Unlike Ossetia, though, it has no recognition at all as a sovereign territory AFAIK.
Neither state is recognized by very many nations. They still function as states. Other nations choose whether or not to recognize them based more on politics than realities on the ground.
The definition of a state, nation-state, sovereign state, and nation are all pretty crystal clear. Taiwan does not satisfy sovereign state as its sovereignty is both contested and denied by most of the world.
They have definitions but how any given area falls into them is anything but clear. Political scientists like devising neat little boxes that reality blurs into real world shades of grey.
And now my argument quota for the day has been exceeded. . .