"And if Allah had willed, He could have made you one nation," meaning: upon the religion of Islam.
﴿وَلَوْ شَاءَ اللَّهُ لَجَعَلَكُمْ أُمَّةً وَاحِدَة﴾ يَعْنِي: على مِلَّة الْإِسْلَام.