Is a betrothed woman considered a wife according to Islamic law, and is she required to observe the iddah (waiting period) after a divorce decree is issued, given that she has been separated from her husband for more than three years and the divorce was finalized only recently?

The girl is still under the marital bond of her husband until he divorces her or the judge rules for her divorce. The husband's absence from her is not considered a divorce. It is not permissible to contract a marriage with her before the completion of her waiting period (iddah) after the divorce, and any contract made before that is considered Islamically null and void. Ibn Qudamah said: "As for invalid marriages, such as marrying a woman who is already married or in her waiting period (iddah) or similar situations, if they both know what is permissible and what is forbidden, then they are fornicators and are subject to the prescribed punishment, and the lineage (of any child) is not attributed to him." You both must seek forgiveness from Allah and cease any relationship until the divorce is finalized and the waiting period (iddah) is completed.