Through this paper, an anthropological and historical approach was used in the first part, in order to understand Ethiopia’s modern state building process since the fall of Haile Selassie’s empire to the rise of the Ethiopian People’s Revolutionary Democratic Front (EPRDF). Some of the key initiatives and notions related to the country’s democratic transition was presented, specifically the centrality of identity politics in Ethiopia’s modern nation-building and the concept of “democratic developmental state” coined by Meles Zenawi. Then, in the second section, those factors were underlined that have contributed to the federal arrangement under which the country is gradually and surely building its national identity, in order to reach national consensus around its growth and transformation agenda. Finally, the modern developments in the country within its geopolitical context was showcased, taking into account Ethiopia’s engagement within its regional and sub-regional environments.