Why is Vatican City considered an independent nation-state?

Vatican City is considered an independent nation-state primarily because its sovereignty was formally recognized by the Italian government through the Lateran Treaty in 1929.12

Following the unification of Italy in the 19th century and the subsequent annexation of the Papal States in 1870, the papacy lost its territorial holdings and the pope remained within the Vatican grounds for nearly 60 years. The 1929 treaty resolved this conflict by establishing Vatican City as a sovereign, independent state. This status was created specifically to ensure the pope—as the leader of the Holy See—could exercise his universal authority and govern the Roman Catholic Church without interference from any other temporal power.132

As an independent state, Vatican City maintains its own government, where the pope holds absolute executive, legislative, and judicial powers. It also possesses the functional attributes of a state, including its own postal system, radio station, and diplomatic representation through the Holy See, which is recognized under international law.12