Spot the Difference

http://geography.about.com/od/politicalgeography/a/scotlandnot.htm

Has space or territory that has internationally recognized boundaries (boundary disputes are OK).
Yes, Scotland does have internationally recognized boundaries. Scotland is 78,133 square kilometers in area.

Has people who live there on an ongoing basis.
Yes, according to the 2001 census, Scotland's population is 5,062,011.

Has economic activity and an organized economy. A country regulates foreign and domestic trade and issues money.
Somewhat. Scotland certainly has economic activity and an organized economy; Scotland even has its own GDP (over 62 billion pounds as of 1998). However, Scotland does not regulate foreign or domestic trade, the Scottish Parliament is not authorized to do so.

Under the terms of the Scotland Act 1998, the Scottish Parliament is able to pass laws on a range of issues known as "devolved issues." The United Kingdom Parliament is able to act on "reserved issues." Reserved issues include a variety of economic issues: fiscal, economic and monetary system; energy; common markets; and trade and industry.

The Bank of Scotland does issue money but it prints the British pound on behalf of the central government.

Has the power of social engineering, such as education.
Somewhat. The Scottish Parliament is able to control education, training, and social work (but not social security). However, this power was granted to Scotland by the UK Parliament.

Has a transportation system for moving goods and people.
Somewhat. Scotland itself has a transportation system but the system is not fully under Scottish control. The Scottish Parliament controls some aspects of transportation, including the Scottish road network, bus policy and ports and harbors while the UK Parliament controls railways, transport safety and regulation. Again, Scotland's power was granted by the UK Parliament.

Has a government that provides public services and police power.
Somewhat. The Scottish Parliament has the ability to control law and home affairs (including most aspects of criminal and civil law, the prosecution system and the courts) as well as the police and fire services. The UK Parliament controls defense and national security across the United Kingdom. Again, Scotland's power was granted to Scotland by the UK Parliament.

Has sovereignty. No other State should have power over the country's territory.
No. The United Kingdom Parliament definitely has power over Scotland's territory.

Has external recognition. A country has been "voted into the club" by other countries.
No. Scotland does not have external recognition nor does Scotland have its own embassies in other independent countries.

Thus, as you can plainly see, Scotland (nor Wales, nor Northern Ireland, nor England itself) is not an independent country nor is it a State. However, Scotland is most certainly a nation of people living in an internal division of the United Kingdom of Great Britain and Northern Ireland.