Slightly smaller than the area encompassed by the Mall in Washington, DC, the Vatican City, also referred to as the Holy See, is the world’s smallest state. The Vatican City is a landlocked enclave in Rome, Italy with an estimated population of 790. The majority of these inhabitants live within the 109 acre state.
The Holy See's diplomatic history began in the fourth century, but the boundaries of its territorial control have shifted over the centuries. From the 8th century through the middle of the 19th century, it held sway over the Papal States, which included a broad band of territory across central Italy. In 1860, after prolonged civil and regional unrest, Victor Emmanuel's army seized the Papal States, leaving only Rome and surrounding coastal regions under papal control.
In 1870, Victor Emmanuel captured Rome itself and declared it the new capital of Italy. In 1929 the Italian Government and the Holy See signed agreements creating the State of the Vatican City.
State Department Background Notes; CIA World Factbook, 1/2005; 2/2005