Yes, Vatican City is a sovereign city-state, and is considered it’s own autonomous nation. The funny part about this is that the area is only about 2-miles in size and it’s a small morsel of space that is completely surrounded by the larger city of Rome. It’s smaller than Central Park and is literally the smallest ‘country’ in the world!
To take the irony a step further, Rome was once the largest empire in the world, covering parts of Europe, Africa, and the Middle East. Now, it is merely a city and doesn’t even earn the country-status and reputation of its religious capital, Vatican City. Go figure.