It is one of the core concepts of sovereignty--defining a territory and then deciding who or what gets to be inside. Along with a government with a monopoly on violence used inwards, and some foreign relations directed outwards, you have the recipe for a modern country.
>Nations and kingdoms have been able to assert sovereignty for eons.
by asserting monopoly on violence within a geographical region... and now we got private mercenaries, guess Treaty of Westphalia is kinda out of windows now or soon?