Yes, that is one possible explanation, even though it appears a little simplified because it is omitted that "ethnicity" is mainly used to describe a relation between two or more groups with a focus on cultural differences. This process is called "ethnisation". The process of ethnisation is often accompanied with certain danger, it is often the hegemonic group which ethnicises another group by using clichés and stereotypes. Therefore: look who's talking. 

Ethnicity is neither culture nor nation. It can be regarded as a part of a certain culture - which is also a quite complex concept - which always work in relation to others. Nation is a political community, located on a certain territory. Ethnicity goes beyond national and territorial borders.