When God divided the nations at the Tower of Babel, He assigned certain angels to rule each nation.
We previously established that the first world was the period between creation and the flood.
We noted that the building of the Tower of Babel was apparently a rebellion against GOD's command to spread out and populate the earth. Because of the ability the people possessed to succeed at their conspiracy, GOD scattered the people and confused their languages so that they couldn't easily communicate and complete the tower.
While the Genesis account does not mention this, later on, Moses explained that GOD put angels in charge of each nation when He divided them at Babel.
7 “Remember the days of old,
Consider the years of many generations.
Ask your father, and he will tell you;
Your elders, and they will tell you:
8 When the Most High divided the nations,
When He scattered the sons of Adam,
He set the boundaries of the nations
By the number of God's angels.
9 For the Lord's portion became the people of Jacob;
The allotment of His inheritance is Israel.
(Deuteronomy 32:7-9 OSB)
Scripture contains many additional references to the angels' role in ruling over the Gentile nations. I have covered these things in detail here and here.
By the time of the first century, when the New Testament was being written, we see that this second world under angelic rule was still in place.
5 For He has not put the world to come, of which we speak, in subjection to angels. 6 But one testified in a certain place, saying:
“What is man that You are mindful of him,
Or the son of man that You take care of him?
7 You have made him a little lower than the angels;
You have crowned him with glory and honor,
And set him over the works of Your hands.
8 You have put all things in subjection under his feet.”
For in that He put all in subjection under him, He left nothing that is not put under him. But now we do not yet see all things put under him. 9 But we see Jesus, who was made a little lower than the angels, for the suffering of death crowned with glory and honor, that He, by the grace of God, might taste death for everyone.
(Hebrews 2:5-9 NKJV)
What the Hebrews writer was saying here is that, at the time of his writing, although GOD (through the psalmist from which he quoted [Psalm 8]) had promised to put everything under Jesus' feet, that hadn't been fully completed yet. But, it was in progress because Jesus had been crowned with glory in honor, so the rest would be fulfilled soon thereafter.
When GOD divided the nations, He looked forward in time and kept Israel for Himself. Now, yes, this "Israel" does refer to the physical descendants of Jacob, but only the faithful. Thus, more accurately, the people of Israel are those who have the faith of Abraham (Jews, but also, under the new covenant, Gentile Christians). As the apostle Paul expressed it:
6 But it is not as though the word of God has failed. For they are not all Israel who are descended from Israel; 7 nor are they all children because they are Abraham’s descendants, but: “through Isaac your descendants shall be named.” 8 That is, it is not the children of the flesh who are children of God, but the children of the promise are regarded as descendants.
(Romans 9:6-8 NASB)