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.
Austrian nationalism
German nationalism began to rise rapidly within the German Confederation, in 1866 the feud between the two most powerful German states Austria and Prussia finally came to a head in the German war in 1866. The Austrians favoured the Greater Germany unification but were not willing to give up any of the non-German-speaking land inside of the Austrian Empire and take second place to Prussia. The Prussians however wanted to unify Germany as Little Germany primarily by the Kingdom of Prussia, whilst excluding Austria. In the final battle of the German war ("Battle of Königgrätz") the Prussians successfully defeated the Austrians and succeeded in creating the North German Confederation. In 1871, Germany was unified as a nation-state as the German Empire that was Prussian-led and without Austria. Nevertheless, the integration of the Austrians remained a strong desire for many people of both Austria and Germany, especially among the liberals, the social democrats and also the Catholics who were a minority within the Protestant Germany.