Final answer:
Frederick William IV of Prussia rejected the title of German Emperor offered by the Frankfurt Assembly, as he believed a king's divine right couldn't be conceded by an elected assembly. This monarchist perspective caused a setback for the early attempts at German unification under a liberal parliamentary system, which was later achieved through Bismarck's Realpolitik and resulted in the establishment of a constitutional monarchy.
Step-by-step explanation:
Prussian King Frederick William IV rejected the offer to become emperor of Germany by the Frankfurt Assembly because he believed that a monarch's divine authority could not be legitimized by a parliamentary entity. He viewed the crown offered by the parliament, which represented a liberal, unified Germany, as a "crown from the gutter," implying a devaluation of the traditional monarchical power that derived from a divine right rather than popular sovereignty. This rejection was pivotal in the history of German unification, as it resulted in a temporary setback for the liberal nationalists who had hoped to create a constitutional monarchy in a unified Germany.
The Germanic Confederation was a critical stage towards unification, which first failed but later succeeded under a different model. The efforts of Otto von Bismarck, who championed Realpolitik, paved the way for eventual unification following a war with France, which led to the proclamation of the German Empire in Versailles with Wilhelm I as Kaiser and Bismarck as Chancellor, establishing a constitutional monarchy with the emperor holding significant authority.