This portion of Isaiah is the beginning of the Millennial Reign of Christ. If you read Isaiah 14:7 it tells you that the Earth is at rest, peace. The ninth verse tells us why the Earth is at rest: Lucifer has been cast into hell (Rev. 20:2&3) for a thousand years. Isaiah 14:12-17 reveals the taunts from the other fallen angels as he enters hell:

How art thou fallen from heaven, O Lucifer, son of the morning! how art thou cut down to the ground, which didst weaken the nations!
For thu hast said in thine heart, I will ascend into heaven, I will exalt my throne above the stars of God: I will sit also upon the mount of the congregation in the sides of the north:
I will ascend above the heights of the clouds; I will be like the most high.
Yet thou shalt be brought down to hell, to the sides of the pit.
They that see thee shall narrowly look upon thee, and sider theee, saying, Is this the man that made the earth to tremble, that did shake kingdoms:
That made the world as a wilderness, and destroyed the cities thereof; that opened not the house of his prisoners?

As for these verses applying to the King of Babylon (Nebuchadnezzar) in Isaiah's time: Babylon is not destroyed until after the middle of the Tribulation (Revelation 18:10), a still-future event.