Wir leben in diesem Staat.

Because in is followed here by the dative case.

In Wir leben in diesem Staat, the phrase in diesem Staat describes a location: where we live. With in, German uses:

• dative for location / being somewhere
• accusative for direction / movement into somewhere

Since Staat is a masculine noun, the dative singular form of dieser is diesem.

So:

• nominative: dieser Staat
• accusative: diesen Staat
• dative: diesem Staat

That is why diesem Staat is correct here.

No. In is a two-way preposition (Wechselpräposition), which means it can take either the dative or the accusative, depending on the meaning.

Use dative when talking about location:

• Wir leben in diesem Staat. = We live in this state/country.

Use accusative when talking about movement into something:

• Wir gehen in diesen Staat. = We are going into this state/country.

A simple way to remember it:

• where? → dative
• where to? → accusative

Wir is in the nominative case because it is the subject of the sentence — the one doing the action.

Here:

• Wir = subject
• leben = verb
• in diesem Staat = prepositional phrase showing location

So the basic structure is:

subject + verb + location

Leben is the present tense form for wir.

The verb is leben = to live.

Its present-tense forms are:

• ich lebe
• du lebst
• er/sie/es lebt
• wir leben
• ihr lebt
• sie/Sie leben

So wir leben means we live.

Also, like many German present-tense forms, it can sometimes translate as either:

• we live
• we are living

depending on context.

German main clauses usually follow the verb-second rule (V2): the finite verb comes in the second position.

In Wir leben in diesem Staat:

1. Wir
2. leben

So the verb is in the correct second position.

This is the normal, straightforward word order. But German can move other elements to the front for emphasis, as long as the verb still stays second:

• In diesem Staat leben wir.

That still means the same thing, but now in diesem Staat is emphasized.

Not exactly.

• Staat usually means state in the sense of a political entity
• Land often means country in a broader or more everyday sense

So:

• der Staat can sound more political, governmental, or formal
• das Land can sound more general or everyday

For example:

• der deutsche Staat = the German state
• das Land Deutschland = the country Germany

In your sentence, Staat sounds a bit more formal or political than Land.

Because all German nouns are capitalized.

So:

• wir = not capitalized unless it starts the sentence
• leben = verb, not capitalized
• diesem = determiner, not capitalized
• Staat = noun, so it is capitalized

This is one of the most noticeable spelling features of German.

Yes.

You can say:

• Wir leben in diesem Staat.
• In diesem Staat leben wir.

Both are grammatically correct.

The difference is emphasis:

• Wir leben in diesem Staat. = neutral
• In diesem Staat leben wir. = emphasizes in this state

When you move in diesem Staat to the front, the verb still must stay in second position, so leben comes right after it.

Not in this sentence.

Im is a contraction of:

• in dem → im

But here you have in diesem, not in dem, so there is no such contraction.

Compare:

• in dem Staat → im Staat (possible, though not always the most natural choice)
• in diesem Staat → no contraction

So in diesem Staat stays as it is.

Yes.

Dieser changes its ending depending on gender, case, and number. Here are the masculine singular forms:

• nominative: dieser Staat
• accusative: diesen Staat
• dative: diesem Staat
• genitive: dieses Staates

Since Staat is masculine and follows in in a location phrase, German uses the dative, giving diesem Staat.

Yes, it can.

German present tense often covers both:

• We live in this state
• We are living in this state

Without extra context, Wir leben in diesem Staat is usually understood as the simple present We live in this state, but the German form itself can sometimes match either English version.

It is singular.

You can tell because:

• diesem is singular dative masculine/neuter
• Staat is a singular noun here

The plural would look different, for example:

• in diesen Staaten = in these states

So in diesem Staat means in this state, not in these states.