The correct answer is - the formation of feudal kingdoms.
After the fall of the Western Roman Empire multiple people that had big regional power used the opportunity and created their own countries where they were the leaders. Italy was divided in many small feudal kingdoms, which most of the time were waging wars against each other and saw themselves as competition. Some of them, even though small in territory and population, managed to become very powerful, and that was due to trade and the accumulation of very big wealth, the best example being Veneto (the territory around the city of Venice).