The Principality of Liechtenstein covers 160 square kilometers between Switzerland and Austria. The Rhine River forms its western border. The population stands at approximately 39,000 people, making it the sixth-smallest country by population. Roughly one-third of residents are foreign nationals. The capital Vaduz houses government institutions and the princely castle, but Schaan is the largest municipality by population with around 6,000 residents. Eleven municipalities comprise the country: Vaduz, Schaan, Balzers, Triesen, Eschen, Mauren, Triesenberg, Ruggell, Gamprin, Schellenberg, and Planken. German is the official language, though Alemannic dialects dominate everyday speech.
The territory that became Liechtenstein consisted of two medieval lordships: the County of Vaduz and the Lordship of Schellenberg. Prince Johann Adam I of Liechtenstein purchased Schellenberg in 1699 and Vaduz in 1712. The Holy Roman Emperor Charles VI combined these territories into the Principality of Liechtenstein on January 23, 1719. The new principality gave the Liechtenstein family a seat in the Imperial Diet, fulfilling their requirement to hold land directly from the emperor. No member of the princely family had actually visited their new principality until 1842. Liechtenstein became a sovereign state in 1806 when Napoleon dissolved the Holy Roman Empire.
The country abolished its standing army in 1868 following the Austro-Prussian War and declared permanent neutrality. This decision removed the financial burden of military expenses from a small population. Liechtenstein sent 80 soldiers to guard the Tyrolean border during the Austro-Prussian War in 1866; they returned with 81 men, having made a friend. The principality avoided both World Wars through its neutrality declaration. In 1938, Franz Joseph II became the first reigning prince to take up residence in Vaduz Castle, ending the tradition of absentee rulers.
A new constitution adopted in 1921 established Liechtenstein as a constitutional monarchy. The document grants the prince significant powers including the right to dissolve parliament, veto legislation, and appoint judges. A referendum in 2003 expanded princely powers further, allowing the prince to dismiss governments and veto laws by emergency decree. This vote passed with 64 percent approval despite international criticism. Prince Hans-Adam II has reigned since 1989, though he delegated day-to-day governance to his son Alois, Hereditary Prince, in 2004. The princely family owns LGT Group, a private banking and asset management company, as well as extensive agricultural and forest land across Europe.
Liechtenstein formed a customs and monetary union with Switzerland in 1923, adopting the Swiss franc as currency. The country entered the European Economic Area in 1995, gaining access to the European single market without joining the European Union. This arrangement allows free movement of goods, services, capital, and people between Liechtenstein and EU member states. The financial services sector generates roughly 25 percent of gross domestic product. Low corporate tax rates attracted thousands of holding companies and foundations. International pressure since 2000 has forced greater financial transparency; Liechtenstein signed tax information exchange agreements with numerous countries and joined the Schengen Area in 2011.
The population is predominantly Roman Catholic, approximately 73 percent according to recent surveys. Vaduz Cathedral, dedicated to St. Florin, was built between 1868 and 1874 in neo-Gothic style and became a cathedral in 1997 when the pope established the Archdiocese of Vaduz. St. Mamertus Chapel in Triesen dates to medieval times and remains an active pilgrimage site. Protestant denominations account for roughly 8 percent of the population, while Muslim residents comprise about 5 percent. The constitution guarantees freedom of religion.
Triesenberg, situated at 880 meters elevation on a terrace above the Rhine Valley, preserves distinct cultural identity from its founding by Walser settlers. The Walser people migrated from Valais in Switzerland during the 13th and 14th centuries, establishing communities throughout the Alps. Triesenberg residents historically spoke a unique Walser dialect and maintained mountain farming traditions. The Walser Museum in Triesenberg documents this heritage through tools, clothing, and household items. The village of approximately 2,600 residents still celebrates Walser cultural practices, though the dialect has weakened among younger generations.