Lots of important ideas are flowing, but a clear concept of development is being left out. First, it seems to me that identity of any kind comes from action and experience. I recall Peter's question about whether civic identity was at all similar to self-concept. The literature I know says that self-concept follows from action/experience and is not grounds for action. Students don't first have a positive self-concept, then perform well academically, but perform well, then develop a positive academic self-concept. The developmental aspect is important because it helps unravel relationships between terms.
Second, in focusing on youth (and children), we are talking about persons in-the-making. If this is correct, then concerns about the role of schools and the state ought to be tempered. School instruction is not determinative, but serves as exposure which youth then make sense of and rework as they experience further aspects of life. Think of youth in East Germany who were reared in a non-democratic system by the state's heavy hand. Studies show that the majority of these youth adapted quickly to democracy and capitalism after 1990. (One could use other case, say, youth reared in religious schools.) The point is that youth don't absorb instruction as it is meant or as it may appear literally. They interpret it according to their developmental understanding. I worry less about what schools or the state thinks they are instructing, than about youth's opportunities to participate as actors in political processes. It is participation that ought to lead to the construction of civic identities.