There are two physical basis of State, Territory and People.
Territory includes lands and all inland bodies of water and the sea within the three (3) mile limit of its shores. Territory of States can decrease or increase through: Discovery (As in the case of Spain with the Philippines), Conquest (As in the case of US to Mexico’s California), Accretion, Prescription and or cession thru gift (as in the case of Great Britain to China’s Hong Kong); exchange or purchase (As in the Case of Spain selling the Philippines to US for 20,000,000 dollars).
People refers to the occupants of the territory. There is no required number of people necessary to make up a state. However, it should be enough to ensure the maintenance of the State and for the State to carryout its domestic and international obligation.