Martin Luther and, more accurately, the rise of Protestantism, affected Germany's political state by helping to solidify differences between various states within what is now Germany. It also helped to create more tension between the states and the Holy Roman Emperor.
Germany at the time was made up of hundreds of little states. They supposedly owed allegiance to the Holy Roman Emperor, but were in fact fairly independent. The rulers of the states did not want the Emperor to be too strong. They had already resisted him politically. Now, religion (in the form of Luther's teaching) gave them a new way to resist him. They could use Lutheran ideas to claim that the Emperor was a creature of the Catholic Church. As some rulers did this, differences developed and hardened between them (those who became Protestant) and those who remained Catholic and loyal to the Emperor.