Uruguay UK /ˈjʊəɹəɡwaɪ/US /ˈjʊɹəɡwaɪ/ noun1 •A country in South America. Official name: Oriental Republic of Uruguay. Capital and largest city: Montevideo.The conflict was finally settled in 1828 with the creation of the buffer state of Uruguay, but the prestige of the emperor had suffered a further blow as a result of this reverse, as it was perceived. — 1992