To Mendez
1) It is not a member of the UN.
So it is not part of an organization. "The United Nations is an intergovernmental organization established 24 October 1945 to promote international co-operation." It doesn't take anything from a country not being a part of it (and even if you are a part of it you are pretty much irrelevant if you are not part of the big 7(?))
2) Vatican City does not conduct any diplomacy, has no diplomatic service, and no embassies.
OK, it doesn't play with other countries. So what? Why would it need to? Why would a state need to have diplomatic ties with other countries?
3) There are no permanent citizens, as citizenship expires when the citizen no longer works in the Vatican.
Now this is an interesting thing. IMO it doesn't make any difference but I can see how it does to others.
4) The Vatican has no functional police force, or any real criminal justice system more broadly
What is Corps of Gendarmerie of Vatican City? Also Wikipedia states it has criminal justice system. What are your points? Sources on the claims?
To the other guy "correcting" me:
Also both the Holy See and Vatican City State grant passes: "The term "Vatican passport" can mean either a passport issued by the Holy See or one issued by Vatican City State. The state can issue normal passports for its citizens; the Holy See issues personal, diplomatic and service passports." I was right then to say that.
The idea of a country is not straightforward, therefor one cannot say it is not a country, since it has been recognized by other countries, has autonomous control of its lands, indeed has police force and law system (military is not needed by a country contrary what others may claim), is invited by the UN to be a viewer or whatever (so has been Palestine but it does not fill other requirements).