Recommendation: Balkanisation / Balkanization
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JayDaley commented
The term "Balkanisation" or "Balkanization" is regularly used in the context of fragmentation, particularly Internet fragmentation, to indicate the whole splitting up into multiple parts with barriers in-between those parts. In most cases "fragmentation" is a suitable replacement.
The case for not using the word is that it's associating a bad thing (unwanted fragmentation) with a specific region of the world, which is insulting.