St. Peter's square is a large plaza in Rome, Italy located in front of a church known as a Basilica. It is noteworthy in history as the place where Emperor Nero, after blaming Christians for the fires that consumed Rome, began the Empire's first state-sanctioned persecution of Christians.
According to the Roman Catholic church, the exact location in the general area shown above is where they believe St. Peter was crucified. They state the place of his death has been "preserved by tradition through out the centuries" (1913 Catholic Encyclopedia). A modern altar within the church named after the apostle, according to Catholics, marks where he was martyred.
The obelisk in the middle of St. Peter's square originally came from Heliopolis in Egypt. Roman Emperor Augustus had the obelisk moved to Alexandria, where it stood until Emperor Caligula (emperor from 37 to 41 A.D.) transfered it to Rome. It was placed in what would be called Nero's circus, most of which existed within the confines of modern-day Vatican city. In the circus it witnessed Nero's cruel games and the martyrdom of Christians. The obelisk was moved to its current location (in the middle of the above image) in St. Peter's square in 1586.
Modern St. Peter's square is located within Vatican City (also referred to as the Holy See), which is considered the smallest state in the world. Rome was considered the capital city of the Papal states from the 8th to the middle of the 19th century. Catholic Popes were rulers over pieces of Italy for hundreds of years until around the very early 1860s when many Papal land holdings were seized in a push to have a unified state. When the city of Rome itself was annexed in 1870 and made the capital of a unified Italian kingdom a year later, the holdings of the pope were diminished further.
After years of dispute, three treaties (Lateran) were agreed to in 1929 by Italy and the church. They created what we today call Vatican City. These treaties gave Catholicism a unique status in the country. The Lateran Treaties also granted the state authority over twenty-three locations in the city of Rome, which included St. Peter's square) and the Pope's residence at Castel Gandolfo (his summer home).
At the present time, the total area of what is known as Vatican city (the Holy See) is 0.44 square kilometers (or .169 square miles). It has an estimated population, as of the year 2017, of 1,000 people (CIA Factbook).
St. Peter's square, and the entirety of Vatican City, is funded through a variety of sources. Income, in part, is derived from fees charged in the Vatican's museums and from various publications. Coins, stamps and other tourist mementos are also sold to generate income. Industries within the city that help fund its operation include printing, coin production, and the creation of stamps and medals. The state also is involved in banks and other financial-related activities.