A state that has supreme power within its territory is called a sovereign state or a sovereignty. The holder of a sovereign state has supreme authority within that state.
The system of sovereign states first emerged in Europe in 1648 at the Peace of Westphalia, a series of peace treaties signed following the Thirty Years War. With these treaties, states such as Switzerland and the Netherlands gained their sovereign status and could no longer be challenged by the Holy Roman Empire. The Catholic Church's powers were subdued, which did not please the Church, leading the Pope at the time, Innocente X, to condemn the treaties as “null, void, invalid, iniquitous, unjust, damnable, reprobate, inane, empty of meaning and effect for all time,” according to Stanford's Encyclopedia of Philosophy. This also began the notion of the separation of church and state.
The sovereign state system spread worldwide, and it eventually led to the decline of the European colonial empires. The sovereign state system is now written into the Charter of the United Nations, and the Charter prohibits attacks on sovereign states.
Sovereignty is always supreme, but it can be limited. This means that while the sovereign holder, or leader, has supreme authority, the scope of that authority can be limited to certain matters.