Smallest country in the world

Vatican City 

           Vatican City is a sovereign state and the smallest country in the world by size, at 0.44 km². Its territory is completely surrounded by Italy and it is only one of three countries in the world that are enclaves of another country (the others being San Marino, also in Italy, and Lesotho in southern Africa).

         Vatican City, in full State of the Vatican City, Italian Stato della Città del Vaticano, ecclesiastical state, seat of the Roman Catholic Church, and an enclave in Rome, situated on the west bank of the Tiber River. Vatican City is the world's smallest fully independent nation-state. 

Encircled by a 2-mile border with Italy, Vatican City is an independent city-state that covers just over 100 acres, making it one-eighth the size of New York’s Central Park. Vatican City is governed as an absolute monarchy with the pope at its head. 

The Vatican mints its own euros, prints its own stamps, issues passports and license plates, operates media outlets and has its own flag and anthem. One government function it lacks: taxation. Museum admission fees, stamp and souvenir sales, and contributions generate the Vatican’s revenue.

Sources : Wikipedia & Google Images