Sentence:  The English, until relatively recently, seem to have imagined “English” and “British” to be interchangeable, as if Britain was just a bigger England. Our dualism gave us a better <WSD>appreciation</WSD> of the nation-state we lived in, though if Britain was a “nation” as well as a “state”, where did that leave Scotland? 
Meaning of the word marked with <WSD> tags:  Accurate perception; true estimation.