"She lives in Taiwan."
The verb 在 (zài) is used to express existence in a place. English does not have a verb exclusively for this purpose and instead uses "to be" with a preposition. In Chinese, 在 (zài) can cover both of these roles.
Subj. + 在 + Place
Remember that you don't need another verb in this construction. It can be tempting to try use 是 (shì), as English uses "to be," but this is not correct. 在 (zài) is the only verb needed.
我在上海。--- Wǒ zài Shànghǎi. --- I'm in Shanghai.
他们在英国。--- Tāmen zài Yīngguó. --- They're in England.
老板在外面。--- Lǎobǎn zài wàimiàn. --- The boss is outside.
他不在学校。--- Tā bù zài xuéxiào. --- He's not at school.
Usually it's 在 + [location] + [verb], but that's mostly for verbs that describe where an action takes place, for example 我在学校看书 "I am reading a book at school". A few verbs that describe a state of being follow the [verb] + 在 + [location] pattern, for example 他住在北京 or 我坐在椅子上 "I am sitting on the chair". Some people say that 我在北京住 can be correct, but you'll rarely hear it and it sounds a bit unnatural. Just remember when using 住, the 在 comes afterwards. And don't worry, there's only a few verbs that follow this [verb] + 在 + [location] pattern.
An earlier question translated as She lives in taiwan was worded: 她夹在台湾。 (Duo's stating that translating that Chinese sentence into the English equivalent.) However, when I translated it that way, it counted it wrong. There is a lack of consistency. Also some of the recordings say "你“ but the written is "我”， or the other way around. So you get them wrong, because you don't know which one they want.
在 + [location] + [verb] is used to describe where an action takes place, like 我在饭馆吃面 "I am eating noodles at the restaurant". [verb] + 在 + [location] is mostly for stative verbs like for example 住 or 坐 (to sit), verbs that describe a state of being, 我坐在椅子上 "I am sitting on the chair". Some people say that 我在台湾住 can be correct too, but you'll mostly hear 我住在台湾. Just remember when using 住, the 在 comes after it (to me it also sounds more natural). There's only a few verbs that follow the [verb] + 在 + [location], so don't worry too much about it.