Complex sentence: It was the setting up of the Mandate of Palestine to the British in the 1920s that the term acquired a defined geographical area, that currently covers the State of Israel, the West Bank and the Gaza Strip.
Split into simpler sentences: It was the setting up of the Mandate of Palestine by the British in the 1920s that the term acquired a defined geographical area. That area currently covers the State of Israel, the West Bank and the Gaza Strip.