Why does San Marino exist? What was so unique about that area that it did not become part of Italy during unification, and instead became a microstate?

I actually wrote my bachelors thesis on nationalism in microstates and San Marino in particular, so I’m going to adapt a part of that for this answer if that is ok with the mods. If you have any follow up questions or if anything is unclear I’ll be happy to help:

The first thing you need to understand about microstates in Europe is that for a large period of time they were extremely common. Essentially from the fall of the Roman Empire until the rise of nationalism in the late 1700’s microstates such as San Marino were the norm, especially in Germany and Italy. The reasons why a few of these survived into the present day differs from case to case, but compared to the hundreds upon hundreds of microstates that did end up conquered by larger nation-states it could be stated that history just sort of.. forgot about a few. For some, like Liechtenstein and Andorra, the fact that they were located between two larger nations meant that both were happy to leave the microstate alone if the other nation did too. For others, like Monaco and San Marino, the friendship and protection of a large neighbor could be used to maintain nominal independence.

As for the history of San Marino, here is a short summary: The traditional tale of the foundation of San Marino dates back to 301 C.E., when a Christian stonemason named Marinus took refuge from religious persecution on the site where the settlement later called San Marino was established soon after. Marinus, who was later sainted, is the origin of Republic’s formal name (“Repubblica di San Marino”), which simply means “Saint Marinus’ Republic” in Italian. The Republic survived regional rivalries during the Middle Ages as well as Papal encroachment under the Borgias in the 16th century. During Napoleon’s Italian campaign in the late 1790s, San Marino’s independence was respected by Napoleon who wished to conserve the small state as ‘a sample of republicanism’, and even offered to expand its territory. The Sammarinese captain-regents declined this offer, foreseeing later revanchism and continuing neutrality as their preferred policy. During the Congress of Vienna Sammarinese independence was confirmed by the major European powers of the time. During the process of Italian unification in the second half of the 19th century San Marino remained neutral, though it extended its “traditional hospitality” – traditional referring to its historical role as a refuge for persecuted Christians in the Roman Empire – to fugitive Italian nationalist revolutionaries. The most significant of these refugees is said to be Giuseppe Garibaldi, who was to play a significant part in the later unification of the Italian Kingdom, when he showed up at the gates of San Marino with some 1500 armed followers in 1849. When the Kingdom of Italy was formed under the former king of Sardinia-Piedmont in 1861, the continued independence of San Marino was recognized by the French Empire, and confirmed in a series of treaties between San Marino and the newly formed Italian Kingdom in 1862. The treaties established the ‘king’s protective friendship’ over San Marino, which held that San Marino would be sovereign in domestic and international matters, provided it would not accept a similar type of influence of any other nation. Since then, the Italian state and San Marino have had close economic and political ties, from Sammarinese currency holding value in Italy and vice versa, to Italian promises to protect the Republic’s sovereignty – though these promises were always intentionally left somewhat vague and were never more than implied, so as to maintain the de jure independence of San Marino. In tandem with Italy, San Marino was ruled by the Sammarinese fascist party from 1926 until their ouster in 1943. Interestingly, San Marino continued its policy of neutrality in both World Wars, despite the Italian participation in both displaying a degree of autonomy from Italy. After the Second World War San Marino’s position as nation-state began to acquire wider recognition, as it joined several international organizations such as the UN in a similar fashion to any other state. Today San Marino is internationally recognized as a fully sovereign and independent state.

San Marino has for centuries sought a policy of neutrality and independence, so by the time Italy was formed their relation to San Marino was one of friendship and protection rather than conquest. Furthermore, San Marino at the time was both politically and economically insignificant, meaning no real benefit would be had by conquering the small republic. On the contrary; the main town of San Marino is located on a steep cliff and has multiple fortifications straddling its peaks. The three towers of San Marino can also be seen on it's flag.

So to answer your question: San Marino has always been able to successfully navigate the international diplomatic waters through a policy of neutrality, good diplomacy and a certain national irrelevance. There was just no benefit to conquering San Marino as opposed to befriending it in the way Italy did. Though it has very close ties to Italy, San Marino is still going strong, independent and sovereign.

Sources:

Miller, William. 1901. "The Republic of San Marino." The American Historical Review 6 (4): 633-649.

Edwards, Adrian, and Chris Michaelides. 1996. San Marino. Vol. 188. Oxford: Clio Press.

Duursma, Jorri, and Jony Dubosch. 1996. Fragmentation and the International Relations of Micro-states: Self-determination and Statehood. Cambridge: Cambridge University Press.