(From Wikipedia) A nation is a large area of land ruled by one government. A country is a region that is identified as a distinct national entity in political geography.
From what I can make out, it would be called a nation before (or without) gaining international recognition (like the Navajo nation in America. It won't become a country anytime soon unless a majority of the population decides that the Navajo nation should become it's own country. It would be called a country when it has international recognition (such as UN status). The amount of countries various from person to person, but I hope that has cleared up when to use each.