Nusantara is an Old Javanese word which appears in manuscript. In Javanese, Nusantara is derived from Nusa and Antara which means “outer islands” or “another islands”. In 1920, Ernest Francois Eugene Douwes Dekker (1879–1950), also known as Setiabudi, proposed Nusantara as a name for the independent country of Indonesia. This is the first instance of the term Nusantara appearing after it had been written into Pararaton manuscript.

The definition of Nusantara introduced by Setiabudi is different from the 14th-century definition of the term. During the Majapahit era, Nusantara described vassal areas that had been conquered. Setiabudi defined Nusantara as all the Indonesian regions from Sabang to Merauke.

Nowadays, in Indonesian, Nusantara is synonymous with either the Indonesian Archipelago or the national territory of Indonesia. In this sense, the term Nusantara excludes Malaysia, Singapore, Brunei, East Timor, and the Philippines. In 1967, it transformed into the concept of Wawasan Nusantara, or “archipelagic outlook,” which regards the archipelagic realm of Indonesia (the islands and seas within/surrounding the country) as a single unity of several aspects, mainly socio-cultural, linguistic, political, economic, security-driven and defensive unity.

Nusantara is also the name of the future capital of Indonesia as abbreviated IKN (Ibu Kota Nusantara), Located between Kutai Kartanegara, Panajam and East Kalimantan. Construction began in July 2022 and the project is expected to be fully finished in 2045. On 29 July 2024 , outgoing Indonesian President Joko Widodo began working from the new presidential palace in Nusantara, where he planned to spend the final months of his presidency on 12 August 2024, the first cabinet meeting was held in Nusantara, making the beginning of transistion of political power from Jakarta to Nusantara.