This is one of the most pernicious and dangerous myths in the world today. The argument goes that the Cairo Declaration and the Potsdam Proclamation provide the legal basis for the return of Taiwan to China. The acceptance of the surrender by Chiang Kaishek's KMT is also used as rational to cement this argument. It is all false.
It is true that in 1943 at a meeting in Cairo, the leaders of the U.K. and U.S. promised that Formosa (Taiwan) would be returned (sic) to China following the war. It is also true that at a meeting nearly two years later (but prior to the conclusion of the war) that the U.S.S.R. signed onto the Potsdam Proclamation. However, none of this provides any legal basis for the transfer of territory to China.
What is required for the transfer of territory is a treaty. This has been long standing international practice. Neither the Cairo nor Potsdam agreements constitute a treaty. In order for these "committments" to be carried out, a peace treaty is needed to formally execute them. It also can not be forgotten that the U.S., U.K., and U.S.S.R. represent only three of the some two dozen allies working together to bring an end to this conflict. A small number of members of that alliance (no matter how important and large) have the right to decide for the others what will happened to various territories, especially considering that the conflict was still in process.
The argument that the ROC acceptance of surrender of Japanese forces on Taiwan in October of 1945 also does not hold any water. Under this argument, northern Viet Nam would also have been Chinese because ROC forces also accepted the surrender of Japanese forces there. Similiarly, sovereignty of northern Korea and northeast China's Manchuria region would have been transferred to the Soviet Union, while the sovereignty of southern Viet Nam, southern Korea and Japan itself would have been transferred to the U.S. In reality, all of these surrenders were done on behalf of all of the Allies and not simply for themselves.
The Peace Treaty of San Francisco formally ended the war in 1952. It was in this document that the territories Japan formally controlled were disposed of. In this treaty, Japan renounces its claim of sovereignty over a great many territories, including Taiwan. However, no beneficiary is named for island. This means that either the territory falls under the sovereignty of the Allies who signed the treaty (China was NOT a signatory), or the sovereignty of the island reverts to the people of Taiwan. According to this arrangement, the people of Taiwan should have been given a voice, but the KMT had its own agenda and during the White Terror, anyone in Taiwan who even suggested this would have disappeared.
It is clear that Taiwan was never returned to China following the war. The people of Taiwan were repressed by an alien regime for 50 years by the Japanese, and then for the 40 years of martial law. Now, Taiwan is a functioning multi-party democracy. The only thing that keeps Taiwanese from expressing their heart-felt feelings for independence is China's constant bullying and threats.