Lichtenstein and the Vatican have contracts with other nations, effectively "renting" their protection.
You don't need a standing army, but having military protection of some kind is vital to maintaining your sovereignty.
All that aside, the only real way to have a nation is to have other nations acknowledge its existence. Good luck claiming sovereignty when not a single member of the UN is willing to say you exist.
I always think of Taiwan / Republic of China.
While most countries don't officially acknowledge it (and, slightly amusingly, Taiwan doesn't officially acknowledge communist China), it is without a doubt its own country with its own military and democratic government, etc.
But yeah the only reason is that there is water between China and Taiwan and China never bothered to attack.