Determining the "smallest" capital city can be ambiguous as it can refer to either population or land area.
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Smallest by Population: Ngerulmud, Palau, with a population of around 200 people, holds the title of the world's smallest capital by population.
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Smallest by Land Area: Vatican City, the world's smallest country, also has the smallest capital city by land area, encompassing just 0.44 square kilometers.
While Vatican City is undoubtedly the smallest in terms of land area, Ngerulmud's tiny population distinguishes it as the smallest capital in terms of inhabitants.