Vatican City is an independent country with the pope as its leader. It has the same function as any other country and its own economy, royal defense force, and government.
The Vatican City is its own nation, sovereign from Italy and other nations. Its official name is the Holy See and it has status within the United Nations as an Observer State.
It does not have any extra-territorial colonies in the usual sense- there is some papal palace some distance from the Vatican proper- but this is most exceptional.l Vatican City is both a city and a...