There's not much to say about this concept – Forster is interested in the troubled relationship between England and Germany, and several of our characters play out these national roles clearly. First of all, we've got the determinedly English characters, namely Aunt Juley and all of the Wilcoxes. The narrator, as well as Margaret, is curious about what makes England English – and who are the real English people, anyway? Part of Englishness is the imperial drive, represented by the Wilcox men, whose desire to conquer and pillage is barely concealed. Another part is Aunt Juley's pride in Englishness, which is demonstrated in her overflowing love for the subtle (but still remarkable), rather clichéd beauties of the English countryside. On the other hand, we have Cousin Frieda, whose pride in Germany is just as strong as Mrs. Munt's pride in England – Frieda represents a wholeheartedly good, though rather reductive, example of German patriotism.
In between these extremes, however, we have the Schlegels themselves – half-English, half-German, we see the conflict between nations played out in each of them individually, and ultimately in the clash between Helen and Margaret.