As a bilingual I find this is best answered comparatively.
English uses the distinct prepositions in and into to distinguish between position (implied permanent) and direction or motion, respectively. 'I'm now in the room' contrasts with 'I'm now going into the room', etc.
Noun-inflecting languages like German express this distinction by the case of the following object and not by preposition. The dative case marks position, the accusative case, direction. Compare im (= in dem) Zimmer (dat.) with ins (= in das) Zimmer (acc.). The preposition in stays unchanged except for the contracted, case-inflected articles dem (dat.) and das (acc.). Thus the difference in meaning stems from declension alone.
Declension is stable across variations in word order; war unterteilt in viele Fürstentümer versus war in viele Fürstentümer unterteilt has absolutely no effect on the logic of case usage. German is like Yoda-speak in this regard - unlike English which relies on rigid word order to identify the direct object of a sentence.
The exact same principle applies to your exemplary sentence, across both languages:
Germany did not initially exist as a country but was subdivided into many principalities.
The statement has an interesting historical subtext because the implication is that a 'whole' has always existed but was split into constituent parts as result of a deliberate political or administrative act. The use of into principalities (EN) or in (acc.) Fürstentümer (DE) connotes motion or direction from a presumed original intact status toward one of active disintegration. You see, innocent grammar can introduce bias!
Irrespective of such observations, in both English and German division is viewed as something with directionality. That's why in English you divide some whole thing into lesser constituent parts. Correspondingly in German, ein Ganzes ist in (acc.) Bestandteile unterteilt.
The difficulty in German comes from the fact that declension markings have eroded over time and are therefore nowadays barely obvious to the unsuspecting learner. The contrast between in vielen Fürstentümern (dat., expressing location) and in viele Fürstentümer (acc., expressing direction or motion) is subtle at the best of times. Alas this is extremely hard to internalise. Ich wünsche viel Erfolg!