IANA allows delegation of country-code TLDs for all countries and territories represented in the ISO 3166-1 standard.

The thing to bear in mind is this standard is used for a number of different purposes historically that has informed territories and other "non"-countries being added.

For example, it is used by postal services for routing physical mail. A lot of far flung island dependencies are coded individually because their mail wouldn't route through their mother country but through other ports.

The addition of "EU", while not a country, reflected the needs of the "EUR" currency code when the Euro was introduced (the first two letters of ISO 4217 currency codes are derived from the ISO 3166-1 standard).

Because the domain name system uses ISO-8859, which provides codes for "countries, territories and islands".

The standard provides codes for such places since different law often applies in territories and on islands.

(See also: UM, TW, EH, AQ, SH, SJ, and many others.)

I think you mean ISO-3166-1, ISO-8859 is a standard for character encoding eg: latin1 (which is probably why you know it).

I think you mixed up your ISOs. ISO-8859 is for 8bit character encodings.