Vatican City

The name "Vatican" predates Christianity and comes from the Latin Mons Vaticanus, meaning Vatican Mount. In antiquity the Roman emperor Nero built his Circus on this hill, where many Christians were matyred. A small graveyard north of the Circus of Nero came to be known as the resting place of St. Peter the Apostle. Emperor Constantine the Great built the first St. Peter's Church.

The bishop of Rome built his political and ecclesiastical influence in late antiquity to an degree that he could claim priority in Christendom. The Popes were able to increase their influence and achieved the temporal power over Rome and its surrounding. This was the nucleus of the later Papal States.

Since the return of the Popes from Avignon in 1377, they have generally resided at the Apostolic Palace within what is now Vatican City. Within Vatican City are religious and cultural sites such as St. Peter's Basilica, the Sistine Chapel and the Vatican Museums.

It is an ecclesiastical or sacerdotal-monarchical state (a type of theocracy) ruled by the Bishop of Rome – the Pope. 

(Source: wikipedia.org)