The principality is coexistent with, and claims the territory of, the town of Seborga which is an Italian municipality.
Uniquely among micronations, Seborga possesses an undisputed history as a feudal state.
It came into being in 954, when the Count of Ventimiglia ceded Seborga to the monks of Lérins Abbey, at the foundation of the Cistercian monastery there. In 1079 the Abbot of this monastery was made a Prince of the Holy Roman Empire, with temporal authority over the Principality of Seborga.
The argument for Seborga's present-day status as an independent state is founded on the claim that this sale was never registered by its new owner, resulting in the principality falling into a kind of legal twilight zone.
Subsequently, in 1815, the Congress of Vienna overlooked Seborga in its redistribution of European territories after the Napoleonic Wars, and there is no mention of Seborga in the Act of Unification of Kingdom of Italy in 1861 .
By 1963 the people of Seborga were sufficiently convinced of these arguments to elect Carbone as their "Head of State". He then assumed the title and style Giorgio I, Prince of Seborga, which he has held ever since.
Carbone's status as "Prince" was confirmed on 23 April 1995, when, in an informal referendum, Seborgans voted 304 in favour, 4 against, for the Principality's constitution, and in favour of 'independence' from Italy.
Prince Giorgio is known locally as 'Sua Tremendità' ('Your Tremendousness' or 'Your Terrificness').
Whatever the validity of these claims, it is worth noting that the establishment of statehood doesn't rely only on formal acts. When the princely abbacy ceased to exist, Seborga, if not bought by Piedmont-Sardinia, would have reverted to Ventimiglia (which since 1139 was subordinate to Genoa) or else become terra nullius. The new state of Italy thus either inherited Seborga, as successor state to both Genoa and Piedmont-Sardinia, or annexed it. Seborga thus became an ordinary Italian commune, as the democratically elected mayor explicitly acknowledges.
Moreover, there is no tension between the "Principality" of Seborga and the Italian government. Law enforcement, public health, telecommunications, school services and all other public services are provided as in the rest of Italy. Seborgans regularly pay taxes, participate in the Italian administrative life, and vote in local and national (Italian) elections. For instance, in the elections of the Senate in 2001 the voter turnout was 84.21%.
In June 2006 a minor controversy arose when a woman calling herself "Princess Yasmine von Hohenstaufen Anjou Plantagenet", who claims to be the rightful heir to the throne of Seborga, wrote to Italy's president offering to return the principality to the state.
A local currency, the luigino, was issued from 1994 to 1996. The luigino is accepted inside the city (along with the legal currency, the euro, and before that both Italian lira and French franc); it is recognized by the International Bank, but without legal value outside the town. Some claim that the Italian government did not welcome this initiative. It is not clear what is the total amount of luigini issued.
The luigino's value is pegged at US$6.00, which would make it the world's highest valued currency unit if it were considered an official currency. Stamps are also issued. The stamps have only a philatelic value, since the only post office is the Italian one. The tourist office currently issues a novelty Tourist Passport. It is not a recognised document valid for crossing international boundaries.