I thought you were using it in a precise way. I'm just inching my way into this argument, having not really read any studies or definitions or relevant texts or anything, but let me just try and untangle what you said there, for my own benefit.
You call it "a shell game" -- is this in the sense that the state is now considered a rather formal, legal and economic framework, and borders mark a geograhical space upon and within which a variety of seperate cultural and religious groups can exist? Is it an abstract construct containing seperate communities that may or may not ineract?
As opposed to the state as an organic whole, tying in legal, economic, cultural, religious, constitutional, even racial norms, celebrated and reinforced through religious, cultural and sporting events and celebrations? To which, therefore, all communities are expected to contribute and conform in varying degrees as the price of citizenship, with all the attendant benefits, such as recourse to public funds and legal protection?
Is the state an abstract, non-demonitional space, or a social contract? And without coming over all Bill Cash, is this settled or complicated by the EU ideal, of a central commission-administered federalised post-national space? Does the social contract become a European ideal, non-racial and homogenised, and dependant upon synthetic products and institutions, such as the European flag and integrated European armed forces? Does this fractured, non-national federalism actually reinforce nationalism through regional micro-nationalisms, integration through seperation and succession and emphasis on difference and historic heritage and mythology? Does Europe threaten British nationalism and identity by inflaming and reinforcing English, Welsh, Scottish, Cornish "nationalisms"? Is this progressive or regressive? Are Welsh and gaelic progressive causes or forces? What does Bradford mean?
To go back to your original definition -- is it individuals or groups or communities whose "personal habits and tastes" are outside the sphere of the state? Is that state no longer a national entity, in this sense, but just a repository for atomised groups and individuals? In that case, if the state whithers away, or states are not formally distinguished except by ecomomic and legal arrangements, does identity go back to smaller units, i.e. regions, religious ghettoes, and indivdiuals? Does this not further undermine legal norms and jurisdiction? Does it increase the likelihood of conflict and xenophobia? Is multiculturalism not a "melting pot" or a varied, mixed, colourful, mutually enhancing and interactive social model, but a fractured and potentially or actually dangerous and hazardous arrangement, undermining the centralised state and leading to a Hobbesian nightmare?
Is multiculuturalism still the melting pot it was sold as, the relativistic social space, dissolving identity, social cohesion and cultural agency? Has it worked in this way? Does it lead to harmony or conflict? What is the model, the Orthodox and atheist Jews in Golders Green and Hendon or the Hasids of Stamford Hill? The Indians or the Pakistanis?