Firstly, a couple of points. Taiwan was formally ceded by the Qing Dynasty to the Japanese in 1895, so while it was not technically "occupied" having been "lawfully ceded by treaty," some people still considered it an occupation. Secondly, the PRC was not established until 1949. China was ruled by the Republic of China (ROC) until their defeat in the Chinese Civil War which forced the ROC to evacuate to Taiwan. The Chinese Communist Party (CCP, or CPC) then established the People's Republic of China thereafter. As such, the main belligerents in WW2 in the China theater were the ROC and the Japanese Empire.

Now that we got that bit out of the way, we can focus on your question. As part of Japan's changing colonial policy, the Taiwanese (known as Takasago) were given strong incentives if not outright pressure to assimilate to becoming Japanese. Adapting a Japanese name in Taiwan was rewarded with increased rations and benefits, more so if a member of the household enlisted in the military. Many also volunteered for military duty out of a sense of Japanese patriotism, although the improved familial rations were also a key factor in this. In the later stages of the war, the Japanese introduced full conscription in both Korea and Taiwan, so as a result, hundreds of thousands of Taiwanese served in the Japanese military, although for the most part they served in garrison duties on Taiwan itself. A significant amount served overseas as well, either in Japan or in front-line duties.

A notable Taiwanese unit was the Takasago volunteers, which were Taiwanese aborigines specifically cultivated as commandos because of the Japanese belief that they were skilled at jungle warfare, which would be necessary for their later operations in the Dutch East Indies.

The Taiwanese did not conduct any major resistance against the Japanese during WWII. This was due to the Japanese policy which carefully manipulated existing ethnic tensions (between Han Chinese and the aboriginal Taiwanese, for example) against each other and away from the Japanese. While the assimilation policy was of questionable effectiveness it was successful in staving off dissent. The Japanese had been somewhat more liberal in their inclusion of Taiwan than in Korea and so there was some limited autonomy on the part of the Taiwanese, including some representation in the Diet. Many Japanese also had settled in Taiwan, although they typically did so in separate towns segregated from the rest of the populace.

In the opening stages of WWII, Taiwan was used as a Japanese airbase to support attacks on the Phillipines. The 11th Air Fleet of the Japanese Navy had several squadrons based in Tainan and Kaoshiung, for instance, and was responsible for the initial assault on Clark Field. These air groups migrated south to support assaults on Malaysia, Indonesia and later the Guadalcanal campaign. However, Taiwan's strategic location along the logistics route between the resources of Indonesia and the Japanese home islands made it an active military location to scout for submarines and to support the war effort in China.

During the later stages of the war, while Taiwan was heavily bombed by Allied aircraft, it still remained a massive fighter base and could have potentially sent aircraft to interfere in the US invasion of the Philippines in 1944. As a result the US raided the island to suppress and destroy the aircraft capacity in a massive aerial battle that decimated the air corps of the area and left them in no position to participate in the battle of Leyte Gulf. The Japanese had been anticipating an invasion of Taiwan and had prepared a large amount of aircraft in Taiwan and Okinawa to intercept and destroy the Allied invasion fleet. However there was no invasion, and at this point the Japanese aircraft were inferior in both quality and quantity, and the end result was to be expected.

The last event of note was a large bombing raid on Taipei itself, which was virtually unopposed and did significant damage to both industrial, military, and civilian areas. Taiwan's airbases were essentially suppressed at this point and would not pose a threat to Allied forces in the region for the remainder of the war.

After the war, Taiwan was returned to the Republic of China. The Japanese were expelled from the island and many of the Taiwanese who had served in the Japanese army were considered traitors. A famine caused by the Japanese departure combined with corrupt and mishandled Taiwanese administration contributed to the 2-28 incident, which were bloody riots and suppression caused by the resulting tension, and led to the White Terror of KMT agents imprisoning or executing suspected dissidents, of which former-Japanese troops were a large factor.