Until World War I, the central government of the United States, for example, played a small role in the lives of its citizens. Its powers were strictly limited, as were its revenues. It was specifically barred from taxing citizens directly. It was a humble government that interacted with the individual states in the union, but didn't interact much with individual citizens.
The first signs of change came after the Civil War. "Progressive" ideas began to emerge. Most of these ideas came from Germany, from philosophers like Karl Marx and Friedrich Engels. The core of these ideas was that the State itself was superior to its citizens. Therefore, the argument went, society ought to be organized to better accomplish the goals of the State.
Today, most Americans have no idea that the foundations of our modern State are based - nearly verbatim - on the demands of Karl Marx's Communist Manifesto.
The extent to which the United States of Awesome has slid towards the Marxist ideal is shocking. If you don't believe me then read the list in the article.