The country of klatch has a policy of never involving itself in the affairs of its neighboring countries, whether it be military conflicts or general power struggles. this is an example of what policy?

I believe this is the policy of isolationism.

Isolationism is the policy where a country decides to separate from the rest of the world, turning rather towards itself and its own needs. Japan used to be an isolated country for a very long time, and even America practiced this policy of isolationism during the world wars because it didn't want to meddle with the rest of the world.