Why was the sixteenth century considered to mark the end of universal Christendom? How did this affect the position of the German Emperor?

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Christianity was never entirely "Catholic" or universal, but until the sixteenth century there remained a fiction of its being a singular universal religion, with the only disagreement or differences attributable to marginal groups of heretics. Two events happened in the fifteenth and sixteenth centuries which made it impossible to deny the pluralism of Christian denominations. 

Although the Eastern Schism, separating the Eastern Orthodox from the Roman Catholic churches, began in 1054, fitful negotiations continued until the failure of the Council of Florence in 1439. The fall of Constantinople in 1453 cemented the breach between Orthodoxy and Roman Catholicism.

The next fracture was the rise of Protestantism in Europe. This meant that there was no longer a unified Christian Church in Europe, with the only exception being the Orthodox far to the east. Instead, Europe itself became religiously fragmented, including Roman Catholics, Lutherans, Zwinglians, and Calvinists, split among many small denominations.

"Germany" as a nation did not exist in this period, but rather the area that was to become modern Germany existed as a series of small states which after the 1555 Peace of Augsburg were governed according to the principle that the faith of the prince was to be the faith of his subjects (cuius regio, eius religio). The Holy Roman Empire was ruled by an "Emperor" selected from among German princes in the fifteenth through early nineteenth centuries, but with the sixteenth century abolition of  papal crowning of the Emperor, and the independence of the German nobles and princes, the "Empire" became increasingly a loose confederation rather than a unified nation.

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