Alternatively, for folks who might be running into issues creating their nation -- the new file makes it more difficult for some reason because of the extra lines? -- you can just edit an existing territory that's dormant and not a baseball playing place like the British Virgin Islands or something. There are even a few stray flags in the OOTP flags folder that you can use to replace their flag with one of the others, you just have to rename it and then rename the abbreviation for the country in the nations xml file.
Doing this saved me a ton of hassle because then you just have to add cities (or in my case, pilfer them from other countries) and then things work fine.
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