I've been seeing a lot of things lately about how the Confederate States of America was recognized by the Vatican City. Is this true, and if so what was the Pope's reasoning for doing this?

/u/Domini_Canes actually just answered this earlier today in this other thread.

TL;DR: The Pope replied to a letter from Jefferson Davis, addressing him as "Illustrious and Hon. Jefferson Davis President of the Confederate States of America." The Confederacy did make use of this in propaganda, but there isn't any sign the Pope meant anything by it beyond courtesy.