Vatican City is not a country that chose a capital. It is the territory the Holy See received in 1929 so that a church in Rome would have ground as a sovereign. The state is small. The church that carries it is not.
Walk around St. Peter's Square and you change sovereignty without leaving the city. The country data count 764 residents. The seed records the area as 0.44 square kilometres. As a whole number that becomes 0. Both say the same thing: this state is smaller than the unit in which atlases usually measure countries. The capital has the state's own name, Vatican City, because there is no further polity inside it.
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Vatican City at a glance
Capital
Vatican City
Area
0 km²
Population
764
Official language(s)
Italian, Latin
Currency
Euro
Continent
Europe
Distinctive fact
A state inside Rome
A territory Rome set aside
The Lateran Treaty of 1929 ended the long dispute between the Kingdom of Italy and the Holy See and cut a state territory out of Rome. Inside it stand St. Peter's, the gardens, the museums and the Apostolic Palace. The pope is head of this state and at the same time head of the Holy See, which leads the church beyond the state. The two offices coincide in daily life and are not the same in law. The See is older than the wall. The state is the patch the wall encloses.
Some churches in Rome and the papal residence at Castel Gandolfo have a special status on Italian soil without entering the counted area. Draw only the state territory and you draw the state, not the whole Roman presence of the See. The only neighbour is Italy, and the border is not an outer frontier in the usual sense. It is the line at which the city of Rome stops being only a city. People cross it on foot. That does not make it any less a state border.
The capital is the state
There is no other city to which the government could be moved, and no hinterland that feeds the capital. The administration speaks Italian. Latin remains the language of the Holy See, of solemn acts and of the church that reaches beyond this wall. Two registers for a patch smaller than a Roman district: one for the working day, one for the claim to be older than the modern states around it. The population figure holds the people who live here, not the people this state claims to lead.
Elsewhere a capital is a choice of site. A country picks a city because it lies in the middle, has a harbour, or has survived a conquest. Here the choice falls away, because city and state are the same ground. The church that the people inside serve does not live inside this population figure. It lives in parishes this patch does not contain. Vatican City is therefore a point on the map and a see in politics. The point can be surveyed. The see cannot.
The wall encloses a state. It does not enclose the church to which this state belongs.
— TerraTally · Countries desk
A church's euro
Payments are in euro. Vatican City has no central bank of its own. It has a monetary agreement with the European Union and strikes its own coins, which are valid across the eurozone. The notes remain the shared ones. For a state whose whole-number area is 0, that is a fitting monetary form: a mark of sovereignty on the coin, and a link to the neighbour's treasury on the note.
It is easy to treat this place as a curiosity, the patch that quizzes like to ask about as a special case. That misses the political geography. After the end of the old Papal States, the Holy See needed ground that was not an Italian province. Italy needed a peace with the church in its capital. The Lateran Treaty cut a state out of that double need, and the state was deliberately not made larger. The smallness is the result of a political settlement, not a surveying accident.
Vatican City lies in Rome, borders Italy and has a church as its sovereign. The population figure, and an area that disappears as a whole number, describe the state. They do not describe the reach of the See that holds it.