The nation state is, but ought not be, the prime unit of political orientation.
In the developed capitalist world the nation state remains the key political organisational unit with its imposed monopoly of violence over its territory, supported by its legal system, bureaucracy and its control of the vast bulk of money held as public funds. Neither sub-units, such as regional authorities, nor supranational ones, such as the European Union, today come anywhere near to outweighing the political might of the nation state.
Several West European states (e.g. Britain, Belgium, Spain) contain nationalist and separatist tendencies. While such autonomous movements should not be politically underestimated, it should be noted that not one state in western Europe has been broken up in this way since 1945. The devolved units, such as Scotland and Catalonia, remain very much secondary to the old political states of which they are still part.
Nonetheless, the independent power and room for manoeuvre of the nation state has weakened in the last thirty years on account of globalisation - or to say that more precisely, the free movement of financial capital and the growing role of transnational corporations. That said, the real power of the nation state was again amply demonstrated in the near financial meltdown in 2008. Collapsing banks could only be rescued by subsidies from nation states, and supranational bodies such as the EU proved themselves weak and ineffective.
What is an entirely different question is: should the nation state be the exclusive unit of focus for the political left? The answer is no for at least two reasons: first nationalism by its nature not only creates a community, imagined or otherwise, for those who are deemed part of the nation, but by the same token it also identifies and excludes those who are not deemed to part of the nation. The striving for socialism, tactical consideration aside, can never be based on preference for one set of people defined by citizenship or ethnicity at the expense of others, because socialism is properly anchored in principles of universalism and internationalism.
The second reason is practical. Reformism is about progressive change brought about by the state, nearly always with popular pressure from below. In the so-called Golden Years, late 1940s to the mid 1970s, the state did bring about meaningful reform in favour of working people. Thus we can clearly see that, though the state is an instrument of capitalist power, it also has the ability to regulate capitalism and can do so on occasion against the interests of capitalists. And today, in so far a globalisation has diminished the power of the national state, the space for progressive reform lost to the nation state can only be taken up by supranational bodies – and in Europe that mean the EU. Such reform is, of course, utterly unrealistic if conceived as the EU alone acting against member states, but is perfectly feasible if it were the EU acting in coalition with several of its big member states.
In conclusion, thought about the political role of the nation state becomes much clearer if we consider separately, but in juxtaposition, first where we are now politically and second what we want to do to realise socialist purposes.