Papal nobility . Papal titles of nobility were specifically recognized by Italy in the 1929 Lateran Treaty establishing the Vatican City State and recognizing the sovereignty of the Holy See . Vatican City . The independent city-state , on the other hand , came into existence in 1929 by the Lateran Treaty between the Holy See and Italy , which spoke of it as a new creation , not as a vestige of the much larger Papal States ( 756 -- 1870 ) , which had previously encompassed much of central Italy . According to the terms of the treaty , the Holy See has `` full ownership , exclusive dominion , and sovereign authority and jurisdiction '' over the city-state .
Vatican City was brought into being by the Lateran Treaty.