Sovereign principality located on the French Riviera/Côte d'Azur, just a few kilometers from the Italian border. The red and white - the colors of the ruling Grimaldi family - flag of Monaco is identical to that of Indonesia

Monaco is about 1,95 km2 (0,73 square miles), and is entirely covered by urban development stretching into France and Italy as well. The whole area is located on hills all the way down to the water, where there's beaches, marinas and a natural harbor. Of Monaco's 32,000 inhabitants, only 5,000 are Monegasque citizens, the rest come mostly from France (40%) and Italy (5%).

Monaco has four cities, or quartiers;

Monaco has no taxation on income, wealth or property, which makes it a popular home address for people with income, wealth or property. French and American citizens pay taxes in their home countries, though. Monaco is also an important finance center, with many banks and institutions located here. The government's revenues come from value-added tax, the casino, taxes on businesses, certain monopolies and tolls. 

The largest company in Monaco, which has the government as its main owner, is SBM (Société des Bains de Mers et du Cercle des Étrangers à Monaco - I like the short version). SBM owns the famous casino in Monte Carlo, the opera, many hotels and restaurants and have 2,600 employees. They also arrange Monaco Grand Prix and the Monte Carlo Rally

The constitution is that of a hereditary monarchy. The government consists of the prince, a minister of state, who has to be French, and three counselors of state. The national council have 18 elected members, and together with the Prince the have the legislative power. There is also a supreme court.

It was the Romans that founded Monaco in the 4th century B.C., as the colony Monoikos from Marseilles (Massalia to the Romans). To them it was an important harbor, Herculis Monoeci portus. The ruling family has since 1297 been the Grimaldi's, although Spain and France have made attempts to take control.

Reference:, britannica