Individuals perceive the State, or more generally, governance of their behaviour, through the interface of law. This is an entirely non-physical process unless or until an individual, after a transgression, real or imagined, falls into the physical clutches of an enforcement agency such as the police.
A normal, law-abiding citizen receives information about the legal and regulatory structures within which life is to be lived from innumerable sources, but certainly including parents and other teachers, her peers, books, newspapers, radio, television and movies; and increasingly from the Internet.
This varied regulatory diet has a great range of origins – village or town authority, regional authority, national authority, supra-regional authority (such as the European Union), global rule-making bodies (such as the International Olympic Committee), churches, professional associations, private clubs or associations (eg your tennis club), even cultural norms without any particular organizational nexus.
Individuals do not in the normal course of life make conscious distinctions between the origins of the rules they adhere to; this is a process that is carried out unconsciously, and it has a great deal to do with internal knowledge of group membership, as explained in the Introduction.
There can be conflicts between group memberships, and these sometimes require conscious decision between conflicting rules, or at least conscious awareness of a decision that has, perhaps, been made unconsciously. For example, traders selling meat in imperial measures (by the pound) in the UK in the 1980s were faced with EU regulation requiring them to sell their meat in kilos. While most traders meekly made the change, for some of them the conflict between two different sets of equally prescriptive rules was very difficult and caused great emotional stress, to the point that they were prepared to be fined or even go to prison rather than accept the new regulations.
Such conflicts are rare, however. That is why they are newsworthy when they do occur. For the most part, people do accept sets of rules that are presented to them in an apparently authoritative way, without enquiring too deeply into their legitimacy. This tendency to conform has evolutionary fitness, emerging as hierarchical group-centred living became the norm. 'We just did as we were told', is a frequent cry of humans who are accused of breaking some law or principle of which they were, or claimed to be unaware.
If nation state rules have been pre-eminent in the last 200 or 300 years, this is because people's lives have been lived in a 'nation state' environment, physically resident for most of the time in a nation state, obliged to fight for it on occasion, speaking its language, and for the last 100 years educated, healed, married and buried by it. Part I of the book showed that this state of affairs is a relatively recent arrival in the course of human history, and that there is nothing whatever in the human psyche to require an organization on the scale of the nation state to oversee it. On the contrary, the nation state can be seen as a perversion on a giant scale of the 'Fathers', the group-centred mechanism that evolved to provide an explicitly moral basis for human society.
Part One of the book has also described how great tranches of business and even personal life are coming under the sway of international or global organizations which provide rule-based codes of conduct. These codes, since they are often delivered with the active involvement of nation states, are readily accepted by individuals. Paradoxically, they are also accepted by nation states, even though each new global 'code of conduct' is another nail hammered into the coffin of the hegemony of the state.