Students of the State are to this day bewildered by the subject matter of their discipline, and disagree over the formation of the modern state. In their search for clarity they have dedicated a relatively large part of their attention to redefining the boundaries between the state and society, and questions regarding the independent role of each in the modern nation-state. This probe left the two settings separate from each other. The renewed interest in the origins of the modern manifestation of the polity, the nation-state, assumed that a better understanding of the beginning would shed some light on the question of its future. The study of nation-state-making may produce a common denominator between the two constructs - society and the state. It is the purpose of this article to look at the role of the territoriality factor in the Jewish case of nation-state-building and to develop it as a concept that combines societal and statist elements. The link between territoriality and legitimacy, institution-building and leadership formation, was a major factor in the transformation of a diasporabased society into a modern polity that eventually became a nation-state.