History of Holy See
It is not right to use the term Holy See interchangeably with the Vatican because as a spiritual authority the Holy See predates both Vatican City and the Vatican Palace; as per the traditions it began in early Christian era with the primacy of St. Peter, who is regarded by Catholics as the first pope of the church.
The site of the Holy See in Rome dates to the foundation of a church by Constantine I (the Roman emperor) in the 4th century. Dedicated to St. Peter, the church was erected close to a cemetery on a hill called Mons Vaticanus (Latin) or Colle Vaticano (Italian), where Christians believed St. Peter’s burial took place. Until 1870 (when the Papal States were disbanded upon the establishment of the Kingdom of Italy), this territorial identification between the Holy See and Rome lasted. Lateran Treaty of 1929 of the fascist Italian government granted independent sovereignty of 44 hectares (109 acres) of land centring on St. Peter’s Basilica to the Roman Catholic Church. This land came to be known as the Vatican City state. Point to be noted here is that between 1870 and 1929, the Holy See’s authority didn’t get nullified by the absence of a temporal seat of government.
Significance of Holy See for Roman Catholicism
Roman Catholicism (Christian church that has been the pivotal spiritual force in the history of Western civilization) along with Protestantism and Eastern Orthodoxy is one of the three main branches of Christianity. Pope leads it as the bishop of Rome, and the Holy See forms the central government of the Church, taking decisions on issues of faith and morality for 1.3 billion Catholics living across the world. The Holy See is aided by the Roman Curia, a group of dicasteries, congregations, and councils with specific duties and responsibilities linked to church matters such as worship and liturgy, missionary activities, doctrine of the faith, religious education, or bishops and clergy. This administrative structure is akin to a presidential and prime ministerial system, with the pope serving akin to president or head of state and the cardinal secretary of state serving like a prime minister or head of government. The pope and Holy See reside in Vatican City (an enclave in Rome situated on the west bank of the Tiber River). Vatican City is the world’s smallest sovereign nation-state. The Vatican Palace (the papal residence in Vatican City north of St. Peter’s Basilica) is one of the most well-known works of Renaissance architecture and a major tourist site.