I have a large amount of experience with nation roleplays, I'd like to think, though all of the ones I participated in were on another site. I was a part of the "NRP Regulars," or, forum users who knew each other quite well and were almost always in one nation roleplay or another. We were addicted to them, to say the least, and through all the fun, hardships, lessons, failures, and successes, we managed to compile quite a bit of information on the ins and outs, do and don'ts of nation roleplays. Ultimately nation roleplays are arduous and difficult to maintain, moreso for the GM if they intend to regulate things heavily.
Nation roleplays, at least to me, involve creating a unique and personal nation of any size or content (at the discretion of the setting and rules), and fine-tuning its aspects in as many ways as possible. Culture, population, military, government, economy, etc. All of it being governed by you, the invisible hand that manipulates this nation. You can play as many different individuals as you want, so long as they belong to the nation you created. The leader(s), a soldier, even a farmer if you really want to play one.
By controlling these variety of individuals (as well a general "set" of people, for example a military at large or a group of politicians), you can dictate the course of the nation's actions; going to war, making peace, engaging in trade, sharing culture, etc. To me nation roleplays afford the greatest variety of player interactions you could possible imagine, all in one roleplay.
But of course, they don't come without issues. But that's for another discussion.