Austrians
Historically, Austrians were regarded as ethnic Germans and viewed themselves as such. Austria was part of the Holy Roman Empire and the German Confederation until the Austro-Prussian war in 1866 which resulted in Prussia expelling Austria from the Confederation. Thus, when Germany was founded as a nation-state in 1871, Austria was not a part of it. In 1867, Austria was reformed into the Austro-Hungarian Empire. After the collapse of the Austro-Hungarian Empire in 1918 at the end of World War I, Austria was reduced to a rump state and adopted and briefly used the name the Republic of German-Austria ("Republik Deutschösterreich") in an attempt for union with the Republic of Germany, but was forbidden due to the Treaty of Saint-Germain-en-Laye (1919). The First Austrian Republic was founded in 1919. The Third Reich annexed Austria with the "Anschluss" in 1938.
Austrians
The Franco-Prussian War and the establishment of a German Empire in 1871, headed by Prussia and pointedly excluding any of the Austrian lands, let the state turn away from Germany and turn its gaze towards the Balkan Peninsula. Thereby the influence of pan-Germanism was diminished in the Habsburg territories, but as the term "Austrians" still was used supra-national, German-speaking Austrians considered themselves Germans (and were counted as such in the censuses). After Bismarck had excluded Austria from Germany, many Austrians faced a dilemma about their identity which prompted the Social Democratic Leader Otto Bauer to state that the dilemma was "the conflict between our Austrian and German character." The state as a whole tried to work out a sense of a distinctively Austrian identity.