What elements are necessary to allow nationalistic ideas to take place? how do you think the spread of nationalism changed world politics?

Nationalism requires a common culture or a common idea as a strong, uniting force.  Most of the nationalism that rose to prominence in the 19th century was based on culture.  The concept of a "nation" stems from the Latin word "natio" which means birth.  People identify themselves as a common group by qualities they all share from birth -- ethnicity, language, customs, etc.  A related element that gives rise to nationalism is contrasting one's own native ethnicity, language, culture, etc with those of neighboring groups who are different.  In the 19th century, empires composed of many linguistic or ethnic groups (such as the Ottoman or Austrian empires) tended to break apart as those groups looked at themselves as nations of their own.   Regions that were broken into many small states but where people shared a common culture tended to come together into new, united nations -- such as the unification of Italy and of Germany as nations.  

The spread of nationalism continued to increase, giving rise to both Anti-Semitism and Zionism, as well as fomenting tensions between nations that would lead to the First World War early in the 20th century.

Starvation, debt, financial downfall.