Brazilian president Dilma Rousseff is second in the list, and Melinda Gates, co-chairman of the Bill and& Melinda Gates Foundation is third.
The 10th annual ranking sees the Queen, who at 87 is the oldest on the list, drop 12 places from last year, while US first lady Michelle Obama — who was number one in 2010 — moved up three places from last year to fourth place.
According to Forbes, this year’s index represents women who are pioneers in politics, business, media, humanitarian concerns, entertainment, and the technology industry.
It also features a number of women who are listed due to their wealth, with all ranked by money, media presence, and impact.
The top figures in the entertainment industry are Beyoncé in 17th place, Angelina Jolie in 37th, and Lady Gaga in 45th.
Merkel tops the list for the third year running and makes her eighth appearance, while former US secretary of state Hillary Clinton, who was second last year, dropped to fifth.
The top women in tech are Facebook chief operating officer Sheryl Sandberg in sixth place, IBM chief executive Virginia Rometty in 12th, Hewlett-Packard CEO Meg Whitman in 15th, and Yahoo! chief executive Marissa Mayer in 32nd.
The women, from 26 countries, have 153m Twitter followers between them. There were 15 newcomers this year, including South Korean president Park Geun-hye in 11th place, Tory Burch, CEO of Tory Burch in 69th, and Spanx founder Sara Blakely in 90th.
Moira Forbes, president and publisher of ForbesWoman, said: “This year’s power women exert influence in very different ways, and to very different ends, and all with very different impacts on the global community.
“Whether leading multibillion-dollar companies, governing countries, shaping the cultural fabric of our lives or spearheading humanitarian initiatives, collectively these women are changing the planet in profoundly powerful and dynamic ways.”
Here is the top 10:
1. Angela Merkel, chancellor, Germany
2. Dilma Rouseff, president, Brazil
3. Melinda Gates, co-chairman of Bill & Melinda Gates Foundation, US
4. Michelle Obama, first lady, US
5. Hillary Clinton, former secretary of state, US
6. Sheryl Sandberg, chief operating officer of Facebook, US
7. Christine Lagarde, managing director of the International Monetary Fund, US
8. Janet Napolitano, secretary of Homeland Security, US
9. Sonia Gandhi, president of the Indian National Congress party, India
10. Indra Nooyi, chief executive of PepsiCo, US