This landlocked nation, once known as Basutoland, is entirely encircled by South Africa. Its terrain is predominantly mountainous, earning it the nickname 'Kingdom in the Sky'. The country's economy relies significantly on water resources and diamond exports. Traditional blanket weaving is a distinctive craft found here. Which country is this?

1. It's a high-altitude kingdom.
2. It's completely surrounded by South Africa.
3. Its major export includes water and diamonds.
4. It's famous for its traditional blankets.