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A neutral territory is a territory (not a sovereign state) that is not an integral part of any state (neither independent, nor dependent on a single state, nor colonized or under protectorate, nor a concession), and yet is not terra nullius, but is the object of an agreement under international law between at least two parties (usually bordering states and/or their colonizers et cetera) that neither shall establish, at least for the duration of the agreement's validity, effective control over it.
When it is a delimited zone bordering at least one of the partners, the term neutral zone applies.
In many cases, a neutral zone is also a demilitarized zone.