A microstate is a very small sovereign state, often characterized by a limited land area and population. These countries typically have their own government and political systems, but their size can make them economically and politically vulnerable. Examples of microstates include Monaco, San Marino, and Vatican City. Microstates often rely on tourism, finance, or specialized industries for their economies. Due to their small size, they may have unique cultural identities and can sometimes serve as tax havens. Their limited resources can lead to challenges in international relations and defense, making cooperation with larger nations essential.