An internal process of nation-building would start from the development of a psychological unity and from that point, work to build an outer societal form that based itself on that unity. An external process, on the other hand, starts with the physical form and works to develop a psychological unity over time through shared interactions in the community, mutual support and interrelationships, and generally developed customs, habits, ideas and cultural norms.
Sri Aurobindo explains: “The external method tries always to mould the psychological condition of men into changed forms and habits under the pressure of circumstances and institutions rather than by the direct creation of a new psychological condition which would, on the contrary, develop freely and flexibly its own appropriate and serviceable social forms. In such a process there must be in the nature of things, first, some kind of looser yet sufficiently compelling order of society and common type of civilisation to serve as a framework or scaffolding within which the new edifice shall arise. Next, there must come naturally a period of stringent organisation directed towards unity and centrality of control and perhaps a general levelling and uniformity under that central direction. Last, if the new organism is not to fossilise and stereotype its life, if it is to be still a living and vigorous creation of Nature, there must come a period of free internal development as soon as the formation is assured and unity has become a mental and vital habit. This freer internal activity assured in its heart and at its basis by the formed needs, ideas and instincts of the community will no longer bring with it the peril of disorder, disruption or arrest of the secure growth and formation of the organism.”
Sri Aurobindo, The Ideal of Human Unity, Part One, Chapter 13, The Formation of the Nation-Unit — The Three Stages, pg. 104
Sri Aurobindo Studies 