Vatican City State
Who & why: on 11 February 1929, Pope Pius XI and Benito Mussolini's Kingdom of Italy sign the Lateran Treaty, ending the 59-year Roman Question by creating a new, deliberately tiny sovereign state — 0.49 square kilometers around St. Peter's Basilica — in exchange for the Holy See formally recognizing the Kingdom of Italy and renouncing any claim to the former Papal States. It remains the world's smallest internationally recognized sovereign state, governed by the pope as an absolute elective monarchy.
What it represents: the yellow-and-white bicolor and crossed-keys-and-tiara emblem carry over almost unchanged from the last Papal States flag, making Vatican City's banner a direct visual continuation of thirteen centuries of papal temporal symbolism rather than a new invention.