For example, people in the USA like dividing themselves up into groups such as "Country-of-Origin-American".
Why don't they simply call themselves "Americans"? No other people does this. Is this divisive or does it help establish comfortable groups for different ethnicities to reside in?
EDIT: Many people have pointed out that the statement "no other people does this" is not accurate. However, I shall leave the statement in the original question to keep the answers relevant.