The correct answer is - 1. Self governing city-states, in the are of the Holy Roman Empire, that had wealthy merchant families and industries known for banking, jewelry making, textiles, and metal working.
These all were states that were the product of the fall of the Holy Roman Empire. The territory of Italy was divided into multiple small but very powerful city-states, which even though small managed to became very important factors in the European and world politics, trade, affairs, banking... They were also very influential in the spreading and strengthening the Catholicism, especially in the Eastern half of Europe.