I think another way in which individuality was lost in our remote past was due to animism, which submerged our species in a magical society of spirits that animated all natural forces and processes.
Only in a relatively cold and dead material world can conscious creatures stand out as "individuals." The burden of that alienation is too much for most people, though, so we still retreat to the mob, renouncing our potential to distinguish ourselves as we surrender to some presumed greater good.
Most people still prefer to follow scripts and perform as functionaries of an institution rather than stand out as free-thinking, creative individuals. Contrary to what we're used to saying, individuality isn't for everyone.