Vatican City is the smallest sovereign state in the world by both
area and population,encircled by a 2-mile border with Italy, Vatican
City is an independent city-state that covers just over 100 acres,
making it one-eighth the size of New York’s Central Park. Vatican City
is governed as an absolute monarchy with the pope at its head. The
Vatican mints its own euros, prints its own stamps, issues passports and
license plates, operates media outlets and has its own flag and anthem.
One government function it lacks: taxation. Museum admission fees,
stamp and souvenir sales, and contributions generate the Vatican’s
revenue.
Vatican
City is distinct from the Holy See (Latin: Sancta Sedes), which dates
back to early Christianity and is the main episcopal see of 1.2 billion
Latin and Eastern Catholic adherents around the globe. The independent
city-state, on the other hand, came into existence in 1929 by the
Lateran Treaty between the Holy See and Italy, which spoke of it as a
new creation, not as a vestige of the much larger Papal States
(756–1870), which had previously encompassed much of central Italy.
According to the terms of the treaty, the Holy See has "full ownership,
exclusive dominion, and sovereign authority and jurisdiction" over the
city-state.
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