it was around 300 a.d. that the bishop of rome became the comprehensive leader, called pope, of the christian church, supported by the roman emperor constantine. from 320 to 360 the first basilica of st peter was built. since then the seat of the "holy see" was rome. originally only a religious domain, from 500 a.d. onwards the holy see became a power player, occupying surrounding areas. this was linked to the split of the roman empire, the collapse of the western part in 476, and the intense efforts of the eastern (byzantine) roman empire to re-install it. the pope, in his secular role, basically operated like a duke who is governing a country.. the following three maps show the "papacy" area over time.
this ended when whole italy was unified in 1870, which included all "papal states", yet only in 1929, through the "lateran treaty" between italy and the holy see, the long-being-there state "vatican" was formally established, now a legally independent country.
the current vatican, the pope's residence since 1377, is located in the middle of rome. nearby is the roman castle saint angelo, positioned west of the river tiber.
the vatican is the smallest state in the world. its size is 49 hectares, and the population is about 800 people