If we want to understand the legal and social situtation of Jewish communities and individuals in Ashkenaz (roughly central Europe) before emancipation in the late 18th and during the 19th century, i.e. before Jews were granted civil rights, it is tempting to think of Jews in the previous centuries as, well, not having had civil rights, which is correct. Yet it is necessary to point out that during those centuries, nobody had civil rights, because the concept didn't exist yet. So in order to understand the situation of Jews in that social order, we need to first have some idea of that social order in itself, which was very different that ours.
Broadly speaking, we are talking about a Christian order of society, more particulary: Western Christian. In that order, there was no "neutral" legal standing, no common denominator such as citizenship nowadays. Instead, there were many different legal standings, starting with the basic division into three so-called "estates": the clergy, the nobility, and the commoners; the latter, in turn, had various different legal standings, mostly depending on whether they were peasants in the countryside or commercial people in so-called "free cities", which had a great deal of self-governance via their own city councils. These city-dwellers - in French: citoyens, in German: Bürger - become the role model for the citizen in its revolutionary, republican sense: Expanding the idea of the city to the whole of society, so that everyone becomes a city-dweller, a citizen, in terms of their legal rights and duties.
In the pre-revoltionary world, however, Jews could not achieve the legal status of city-dwellers, because in order to attain such rights, one had to be Christian. The same goes for the guilds that regulated commercial activities: In order to become of a member, one had to make a Christian oath. The same goes for the clergy and nobility, that owned the most important asset in pre-industrial, i.e. agricultural economies: the land on which the overwhelming majority lived, the Christian peasantry. The peasantry had it worse than anyone else. For many centuries they were actually surfs who couldn't leave the properties with their landlords' permission.
So if Jews didn't fit into any of the legal standings (or "estates") of the Christian social structure, where did that leave them? The Jews were a category of their own, in legal terms: a nation. This meant a whole set of disadvantages as described above, but at the same time it also meant important advantages. For example, Jews had their own (rabbinical) judiciary; were exempt from Christian restrictions on financial activities (yes, money-lending etc., or in more positive terms: Europe's banking system before it had one). In other words, we are talking about a mixture of advantages and advantages: Indeed, as a nation, a legal category of their own, Jews didn't have a right to be anywhere, and wherever they lived, they were always someone's guest and had to negotiate the terms and conditions of their extended presence with the local ruler. On the other hand, this meant they couldn't be forced to stay anywhere, and were always free to leave and go elsewhere - unlike most people at the time.
To sum it up: Back then, being Jewish didn't mean one's "religion", but one's legal position in society. Wherever they lived, Jews were always and necessarily a part of the Jewish community, which was actually a corporation. When dealing with the Christian ruler on communal rights and duties, for example in terms of taxation, the contractual counterpart is the community as a whole. As members of the local Jewish corporation, Jews were legally liable for each other when dealing with Christians, but at the same time, that also meant the Jews had judicial autonomy within their own world.
This legal segregation between Christians (in their different "estates") and Jews (not a part of any estate but a different nation altogether) went along with physical segregation in ghettos; such was the case in Frankfurt for example. But there were exceptions, like Berlin, where Jews and Christians could be neighbors with no physical gap. What Jews everywhere had in common, though, were all the other gaps: In social, cultural, lingual, educational, spiritual and ritual terms, Jews did live much more "next to" the rest of society rather than "with it". In other words: a parallel society to a great extent, a network of many Jewish communities across political borders, doing "their own thing", reading their own books, practicing their own laws, judging in their own courts etc.
This was the historical context for Moshe ben Menachem Mendel or, as he became known in German: Moses Mendelssohn. As a young adult in Berlin, he was exposed to the Christian discourse of Enlightenment. After two centuries of fighting each other, Protestants and Catholics now discovered the value of interreligious dialogue and tolerance. The very talented Mendelssohn thought himself German and began to write in German. Living in the 18th century, most gentiles at the time couldn't read him, because they were illiterate peasants (we're before industrialization, so nobody has an interest in literate workers, thus no school system and hardly any schools outside of the small cities).
However, the gentile scholars did read him, as they were fascinated by the first Jewish philosopher to ever address them directly in German, as if he were one of them. In many ways, Mendelssohn bridged the gap that still kept Ashkenazi Jews pretty much in their own world. And although he was not the only Jew of the 18th century to engage in intellectual interactions with gentiles, known as Haskala or Jewish Enlightenment, he was by far the most successful - maybe even more so after his death in 1786, because he and other Maskilim were still the exception to the Jewish rule, not the norm.
The social mosaic characterizing the Christian order of society came to end with the French revolution and its gradual, though fast-paced secularization of politics: In 1789, the absolute monarchy is turned into a constitutional one; and in 1793, the king is beheaded and the monarchy is abolished in favor of a republic, turning the whole country into a "city" and everyone into a "citoyen", a citizen. Well, everybody?
The revolution posed for the first time the question that will be debated well into the 20th century: What about the Jews? Should and can they also become citizens and enjoy the rights? This Jewish question was answered in the national assembly by count Clermont-Tonnerre, who phrased the principle that will later be adopted and implemented: "We must refuse everything to the Jews as a nation and accord everything to Jews as individuals. " This meant, that in order to acquire civil rights as individuals, Jews had to give up on their collective rights as a nation.
And with that, the precedence was set for the trade-off characterizing later on the very complicated process of Jewish emancipation east of the Rhine, in the countries that will eventually become Germany in 1871.