San Marino,Lesotho and Vatican City are the three countries in the world that are entirely surrounded by one other country.Vatican City and San Marino are both completely surrounded by Italy while Lesotho is completely surrounded by South Africa.
Nauru which is bigger than Vatican City has no official capital. All the administrative and government functions of the country are done in Yaren city. Nauru is an island country located in Pacific Ocean and it is the third smallest nation in terms of area. First two smallest nations in terms of area are-Vatican City ..