At just 0.44 km² (0.17 sq mi) and ~800 residents, Vatican City holds the title of the smallest sovereign state by both area and population. An enclave within Rome, it serves as the spiritual and administrative center of the Roman Catholic Church.
Despite its size, Vatican City has all sovereign attributes: government, legal system, postal service, radio station, pharmacy, supermarket, and a railway station (mostly symbolic). The Vatican Museums, St. Peter's Basilica, and the Sistine Chapel draw ~6M visitors annually.
Fun fact: The Vatican's ATM instructions are in Latin—the only ones in the world.