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It is probably incorrect to suggest that the Medieval Church disintegrated, as it did not; however the Reformation itself was a substantial factor in the development of nation-states, primarily in Germany. Here again, however, it should be emphasized that this was NOT the development of European Nation-States based on nationalist sentiments; but rather the disintegration of the Holy Roman Empire along religious lines.
Prior to the Reformation, a substantial amount of taxes collected by the Church were paid from within the Holy Roman Empire. Martin Luther not only attacked what he considered financial abuses of the Catholic Church; he also couched his message in strongly German terms. Luther's translation of the New Testament in fact became the standard Haupt Deutche used in written German texts. The end result was a strongly German nationalist sentiment. More important than this sentiment was the realization by many German princes that if they embraced Luther's ideals (and thereby renounced Roman Catholic doctrine) they not only could collect taxes for themselves which had previously paid to the Church; they could also seize Church properties, which they did with abandon. This resulted in the fragmentation of the Empire along religious lines, with the Northern principalities becoming increasingly Lutheran and the Southern Principalities remaining Catholic. Ultimately, religious differences led to armed conflict: the Wars of Religion. The Peace of Augsburg, which ended the Wars, established the principle of cuius regio, eius religio, (whose region, his religion) which allowed the ruling prince to determine the religion for his state. The Lutheran Reformation was therefore a substantial factor in the disintegration of the Empire and the establishment of independent German principalities.
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