"She continued to impress the world with her cool leadership at two back-to-back summits," Forbes’ article reads.

"First, she stuck to her principles, getting G8 leaders to agree to significant cuts in carbon emissions, among other things. Merkel later corralled European Union countries into an agreement on a treaty to replace the EU constitution," it added.

The Forbes’ “Powerful Women” list is based on "influence," "economic impact" and media "reach".

“Our ranking system starts with a list of women who have crossed certain thresholds. Most of them run companies, governments or nonprofits, or are very close to the top. A handful have established power bases in other ways (an entertainment entrepreneur, a judge and an author have been on the list). The power ranking score is based on a composite of visibility (measured by press citations) and economic impact.” Forbes explained.

Meanwhile, US Secretary of State Condoleeza Rice dropped to fourth place from the second place.

China's vice premier Wu Yi was No. 2, and Ho Ching of Singapore, chief executive of Temasek Holdings, was third ahead of Rice.

Wu "continues to help lead a government that oversees an economy whose gross domestic product may soon eclipse Germany's, making it the third-biggest economy in the world,"

Also in Top 10 PepsiCo chief executive Indra K Nooyi was fifth and India's Sonia Gandhi, president of the National Congress Party, came in at sixth.

The last fourh places in Top 10  were achieved by Cynthia Carroll, Chief executive, Anglo American, U.K., Patricia A. Woertz, Cochairman Archer Daniels Midland, U.S., Irene Rosenfeld Chairman and Chief Executive, Kraft Foods, U.S. and Patricia Russo, Chief executive, Alcatel-Lucent,    U.S.

Oprah Winfrey, the well-known TV star, has landed on the 21st place, two places ahead Britain's Queen Elizabeth II who jumped from 46th to 23rd on the list.

Andrea Jung, Chairman and Chief executive of Avon Products was ranked on the 30th place just in front of Judy McGrath, Chairman, chief executive, MTV Networks,U.S.

The complete list can be found here.