Try to figure out the intersection of a) what are you most passionate about, b) what are you most well equipped to do (language, background, connections, baseline knowledge), c) what is the program you want to apply to equipped to help you pursue (what kind of faculty do they have can be a good way to figure that out).

So once upon a time when I was trying to figure out what I would specialize in I looked at a) my previous work on the environment and passion for it, b) knowledge of French, and c) faculty/library resources to wind up doing a project that combined all three.

Finding the subjects that you are most interested in— or compelled to contribute to— is vitally important. Doing an MA or PhD in just about any field can be soul crushing work. Especially in a field like history where lots of work is done individually it can feel a bit lonely, so being very self motivated and caring deeply about your topic/fields is paramount. If you do a PhD, at some point you will hate your topic, get frustrated, and wish to do anything else— but as long as it’s something you are deeply passionate about or you just obsess about, you should be able to bring yourself back around and out of that darkness. If you just don’t have that connection with a topic, then a PhD and even an MA can be a perilous pursuit— unless you have some other goal driving you, ie teaching high school or attending law school, etc.

Having the skills/background to complete a degree is important to being accepted— it’s also important to your chance for success. You definitely want to gravitate to an area that you are already equipped to do work. Some skills, such as language, can be acquired as you go, but your life will be immensely easier if you already have them— or know you need them and get started right away.

Finally, knowing your resources is important to both being accepted and making progress. I remember a guy applying while I was doing my PhD who proposed a project on Irish pirates. The topic was fascinating, he had a solid background, good proposal— but the university had no resources in that area. It was a topic, time period, and area of speciality that the program simply couldn’t help him complete, so he was rejected. For an MA this can be less of an issue and a program can help you figure this out— but ideally for a PhD you are already in contact with a faculty member when you apply. Someone who believes in your project and can flag your application.

TLDR; it’s a mix of your skills, interests, and what resources your program has.