Which independent state was formally established in 1929 by the Lateran Treaty between the Holy See and the Kingdom of Italy?

Introduction / Context:
This question focuses on European political history and the creation of a unique microstate. The Lateran Treaty of 1929 resolved the long standing Roman Question by defining the status of the papacy and its territorial base. From this agreement emerged an independent sovereign state that is closely associated with the Catholic Church. Understanding this treaty is useful for learners studying international relations and European history.

Given Data / Assumptions:

• The treaty mentioned is the Lateran Treaty of 1929.
• The parties were the Holy See and the Kingdom of Italy.
• The treaty led to the creation of a specific independent state.
• Four small European states are offered as options, but only one was created by this treaty.

Concept / Approach:
The Lateran Treaty recognised Vatican City as an independent sovereign state under the authority of the Holy See. Before this, there was a dispute over the temporal power of the popes after Italian unification removed the Papal States. The treaty established a small territory within Rome so that the Pope could exercise independent spiritual leadership free from direct control by the Italian government. Other small states like Monaco, San Marino, and Liechtenstein were formed under different historical circumstances and are not linked to this treaty.

Step-by-Step Solution:
Step 1: Note the key phrase Lateran Treaty of 1929. Step 2: Recall that this treaty is associated with resolving the status of the Pope and his territory in Rome. Step 3: Remember that the independent state that emerged is Vatican City. Step 4: Select Vatican City from the list of options and eliminate the other microstates that have no connection with the Lateran Treaty.

Verification / Alternative check:
Verification can be done by checking any standard world history book or a reliable encyclopedia article on the Lateran Treaty. These resources clearly state that Vatican City was created as a sovereign entity in 1929 as part of the agreements between Italy and the Holy See. Maps and general reference works also describe Vatican City as the smallest independent state in the world, located within the city of Rome.

Why Other Options Are Wrong:
Monaco is a principality on the Mediterranean coast and its status evolved through separate treaties involving France. San Marino claims a much older origin and was not created in 1929. Liechtenstein, positioned between Switzerland and Austria, arose from entirely different dynastic and territorial arrangements. None of these states are linked in any way to the Lateran Treaty.

Common Pitfalls:
Some learners may guess San Marino or Monaco simply because they recognise them as small European states without associating them with the correct treaty. Another pitfall is to focus only on the date 1929 without remembering the context of the Roman Question. To avoid this, connect the word Lateran with the papal palace and therefore with Vatican City. Building such mental associations makes recall easier in examination conditions.

Final Answer:
Vatican City