You're using an equivalence of the "languages are dialects with armies to back it up". That is fine for nationalities, but not for ethnicities. Austria having an army does back up their claim to a nationality, but it does nothing to change that they are German by ethnicity, whether the people themselves see themselves that way or not. There is not, and never can be, an American ethnicity, or Canadian. There is no defining ethnogenesis by way of isolation from a larger ethno-racial group or a mixing of two or more established ethnic populations resulting in a future population with unique genetic markers that can be traced back showing descent from that group. If a hypothetical blood or genetic test can't find unique markers to set your group apart then it's not an ethnic group.
It's very rare that modern anthropologists define ethnicity in terms of "blood".
In anthropology and sociology, there are three main schools of thought on the development of ethnicity and ethnogenesis.
1.
Primordialism: the view that ethnic groups exist because they are based on shared traditions of behavior, belief, and action towards "primordial" factors. These factors include "biological features" (e.g. appearance), territorial location, and historically formed schema (e.g. "ancient national hatreds") in which traits believed to be essentialist may shape behavior and action in a way perceived to be relevant (even if this relevancy may be onset by environmental circumstances). This is the older view, doesn't strictly refer to "blood", and is the least common academic view.
2.
Instrumentalism: the view that ethnic groups are a result of actions or behaviors shared by community leaders, elites, and people who surround those elites. Contrary to primordialism, cultural features of these community leaders or elites are adopted "instrumentally" as a method of social advancement for individuals to become members of these classes. Some forms of political mobilization can make appeals to the concept of ethnicity, which is used "as an instrument".
3.
Constructivism: the view that ethnic groups are socially constructed and the way that they are constructed differs heavily by location, environment, and circumstance. According to constructivists, both the primordial and instrumentalist approaches are too essentialist, because features that may be instrumental in some regions may not apply in other regions. The differences between the same two ethnic groups, may be perceived differently in different locations, and in other words, wholly "constructed" depending on local and regional variations.
Anthropologists mix all three approaches into an integrated approach. Usually, they don't follow one school of thought unilaterally.
Primordialism, which isn't fully based on genetics, certainly isn't the most predominant view. There are some scholars that still adhere to it, but it's probably the least popular among anthropologists today. Constructivism is usually regarded as the most correct; nevertheless, recent scholarship still draws on all three schools.