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Humans consider Leshp (an island, as Detritus remarks, without its teeth in) an uninhabited continent that occasionally comes back up to surface, and when Leshp does come up, countries around the Circle Sea fight over it. Ankh-Morpork on the Sto Plains and Klatch on the continent Klatch almost had a war over Leshp during the events of Jingo. Unfortunately, regardless of the effort that these countries put in to secure Leshp, it always disappears again. Since Leshp spends most of its time underwater, it is in fact a city for the Curious squid.

Annotation

Leshp may be based in part on the Roundworld island of Ferdinandea, an island near Sicily that rises above sea level after periodic volcanic eruptions, only to disappear again after it is sufficiently eroded. When it made its most recent appearance in 1831, it was claimed as territory by four nations (The United Kingdom, France, pre-Italian-unification Naples, and Spain).

Well, that explains the territorial feuding part, yes. However a city of squid-creatures that has lots of squiddy art about the place and occasionally rises to bedevil humanity also echoes R'lyeh, home of Great Cthulhu.