"King George has many strange subjects"?

Dear All:
There are some phrases and words I am not quite sure of the meanings in the short story "Mr. Know All" by W. Somerset Maugham.

"Are you English?" I asked, perhaps tactlessly.

"Rather. You don't think I look like an American, do you? British to the backbone, that`s what I am."

To prove it, Mr Kelada took out of his pocket a passport and airily waved it under my nose.

King George has many strange subjects. Mr Kelada was short and of a sturdy build, clean-shaven and dark-skinned, with a fleshy hooked nose and very large, lustrous and liquid eyes. His long black hair was sleek and curly. He spoke with a fluency in which there was nothing English and his gestures were exuberant. I fell pretty sure that a closer inspection of that British passport would have betrayed the fact that Mr Kelada was born under a bluer sky than is generally seen in England.

URL to the short story: http://maugham.classicauthors.net/knowall/

1. What does "King George has many strange subjects" mean?
2. "He spoke with a fluency in which there was nothing English ...."
Is it that he didn't actually speak fluent English?

Best Regards