I think you probably want

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
version="1.1">

<xsl:variable name="xslSearchText"></xsl:variable>
<xsl:variable name="xslSearchState"></xsl:variable>


<xsl:template match="/">
	<xsl:apply-templates select="//state[@name=$xslSearchState]"/>
</xsl:template>


<xsl:template match="state">
<xsl:variable name="c" select="county/community[@name=$xslSearchText]"/>
<xsl:choose>
<xsl:when test="$c">
<xsl:apply-templates select="$c"/>
</xsl:when>
<xsl:otherwise>
ERROR: nothing found
</xsl;otherwise>
</xsl:choose>
</xsl:template>


<xsl:template match="community">
Just basically displaying the content of the node in HTML Table
format.
</xsl:template>


</xsl:stylesheet>

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