Vatican city was established in 1929, under prime minister benito mussolini. Which is ironic because the fascist leader while raised by a catholic mother denounced the church most of his life. But he knew that the church was powerful and that he needed the support of its followers, so mussolini attempted to show support publicy, and thats why he gave the church absolute freedom. You see, vatican isn't just a city. Its not even a state. The vatican is actually its own country. Its smaller than disney world, but as its own sovereign state, the vatican gets to make its own rules. Vatican city contains the church of saint peter, the sistine chapel and it server as the home of the pope, the divinenly chosen archbishop who rules over one billion catholics.

@WalkSoftly: its called 'vatican city' and its not a city or a state. its it own country. wikipedia it if you must.