Nations are basically an extended form of traditional MMO guilds. They function as social structures and encourage cooperation in terms of raiding, crafting, sieging, and the like. Where they differ from genre norms is in their ability to control land and cities throughout the game world. Cities are a big deal too, and much of the nation gameplay is seemingly focused around city management.
Combat in The Repopulation also departs from MMO convention, and while we've written about it on occasion before, this is the first time that all of the nuts and bolts have been collected in a single easy-to-reference article. Head to the game's official website for all the details.
[Thanks to J.C. for the tip!]