In the fourteenth century, Europe was not an area with the modern countries and borders (as we know them), but a set of kingdoms, duchies, and conquered lands; why, then, do so many consistently refer to the area with their modern names?
To put it simply, it’s what’s easiest. While Spain as we know it didn’t begin to take shape until the sixteenth century, I’ve found most people don’t know offhand where the Kingdoms of Castile, Galicia, León, Aragón, or even Navarre really were – a similar phenomenon in regards to such places as Bohemia (modern-day Czech Republic), the different Germanic principalities, and even some duchies included in the French crown and Holy Roman Empire.
Now, the problem with using the modern country is when the borders don’t always fit. For example, portions of Navarre and Aragón are now within the modern borders of Spain, while Bohemia was later swallowed (or itself consumed) by the Hapsburg Holy Roman Empire. The use of the modern names is to help place a possibly obsolete setting into a reader’s mental map, something which may catch a potential reader’s eye without appearing to veer into fantasy, with made-up lands and the like. An author writing about olden days in faraway lands wants the perfect balance of foreignness, so to speak: just exotic enough to pique interest, without having a pedantic (or worse, fake) air about the work.
Ultimately, I’ve chosen to utilize modern maps and borders when I advertise my books. It’s a more concise to say “medieval Spain” than “medieval Castilla, in the area we now known as Western Spain”, which can be an absolute character suck when I’m writing a Twitter ad; in advertising, you want to quickly catch the eye of your target – you only have a moment before your audience makes that first judgement, and 140 characters forces an even smaller window. When I’m writing, however, all bets are off, and I have no issues with name-dropping defunct kingdoms and titles. Showcasing what I’ve learned through my research is part of the fun of writing a historical fiction.