Yeah, the problem is that png is a raster format, you need a vector format.

Click image for larger version. 

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Raster images are formed by a bunch of dots (called pixels), while vector formats are formed by a bunch of lines using maths. The above image illustrates the difference between these two types of image format - the enlarged "VS" on the left reveals the pixel based structure of a raster image format such as png, while the enlarged "VS" on the right still has crisp and clear lines since that's what the vector format is made from.

The reason you need a vector image is that you want the lines for the borders. Wikipedia has a load of open source maps here, just find an svg one that looks like it has what you need and try it out