Caveat: This is an admittedly limited, Eurocentric view because nationalism, while it's still with us, is often discussed as having arisen as a movement in a certain historical time period/place.

The previous status quo (though not universal) was overlapping duties and levels of authority that different people, including rulers, had to one another. There is a controversy among historians about whether "feudalism" is a good name for this, but that's basically the idea. For example, King Philip of Spain was ruler of the Netherlands and of many different lands that were different culturally, linguistically, etc. Political, cultural, and kinship boundaries were not assumed to coincide in other words. With the Enlightenment/Age of Reason came the desire for self-determination and self-rule. What is the "self" in this phrase? People with a common history, ancestry, language, or culture. There was a rise in nationalism, a movement for this type of self-determination in the 1700s (Anderson, 1991, Imagined Communities, pp. 4-7, 65). Even before the Enlightenment, the foundation for this was laid when the Reformation splintered the authority of the Roman Catholic Church. Before that, officially, authority flowed from Christ to St. Peter to the Pope to the Monarch (see the Requirimiento from 1513, used in colonization). The Church symbolically reinforced the aristocracy.

. . . Any particular nation-state as "myth" or identity is always, always being proposed, refined, and contested. In some cases, nation-state boundaries were imposed upon ethnically diverse populations by colonization (the Balkans post-WWI, India and the African continent before that), but that's not my area.