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Kaiser-Wilhelms-Land is a decision for 
Germany.
The territory of northeastern Papua New Guinea was a German protectorate from 1884 to 1918 (end of WWI). Most of the settlers were miners and plantation owners seeking to exploit the land. The number of European settlers were never high thus assimilation was impossible. Though Germans claimed the territory, they never fully explore the claimed region, but there was an expedition. After the end of WWI, the territory became a part of 
Australia.
Germany needs to own the Northern New Guinea region to make the decision appear. Once appeared, wait until the "Mission to Civilize" has been invented.
Germany will gain 10 prestige and the region's name will be changed to Kaiser-Wilhelms-Land and Madang changed to Friedrich-Wilhelmshafen. There is no way to rename it back again, even if Germany loses control over the state.
Ingame description
Named after the German Emperor, 'Kaiser-Wilhelms-Land' was the German name for the North Eastern Part of the island of New Guinea, which, together with the Bismarck Archipelago and other pacific holdings constituted the German colony of Neuguinea. The territory was occupied by Australian troops during World War One, and held as a League of Nations mandate until 1975.