Kolonia is established as a town.
What happened
Japanese Wikipedia says that from 1931 the Nan’yō-chō recognized settlements with many Japanese residents as self-governing units, each with a headman and an advisory council elected by resident men aged 25 and over. Kolonia was the only one on Pohnpei; Natsushima in Chuuk followed in 1937. Their self-government was limited, and in 1942 the elected councils were abolished.
Related image
Not a photograph of this event itself; the caption says what it shows.

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“Kolonia seaside street, Ponape Island” (ポンペイ島コロニー海岸通り), from the South Seas Government’s photo album marking its first ten years, published in 1932.
Nan’yō-chō (South Seas Government), comp., Nan’yō guntō shashinchō: Nan’yō-chō shisei jūnen kinen (1932). National Diet Library Digital Collections, via Wikimedia Commons.
Public domain (Japanese photograph published before 1958; Commons tag PD-Japan-oldphoto) Source record