Hetalia (made up of the words for useless + italy) is the story of the countries of the world made into people, carrying with them that nation's stereotypes. The main setting is the WWI/WWII era, but other scenes from history (such as the American Revolution) are sometimes depicted.
The story is centered around the Axis Powers, and the main character is Italy, who is a clumsy idiot who loves pasta and pizza. He is joined by the serious sausage-eating Germany and the polite and shy Japan. It is a gag manga that takes pieces of history and makes them funny, poking fun at the stereotypes and quirks of countries around the world.
*Taken from the AnimeSuki Forum
Hetalia: Axis Powers (ヘタリア Axis Powers , Hetaria Akushisu Pawāzu?) is a webcomic, later adapted as a manga and an anime series, by Hidekaz Himaruya (日丸屋秀和, Himaruya Hidekazu?). The series presents an allegorical interpretation of political and historic events, particularly of the World War II era, in which the various countries are represented by anthropomorphic characters. Hetalia (ヘタリア?) is a portmanteau combining hetare (へタレ?, Japanese for "useless") and Italia (イタリア?). This is to make light of Italy's apparent cowardice during World War II.
Himaruya originally created Hetalia as an online webcomic, and so far two tankōbon have been published by Gentosha Comics, the first on March 28, 2008 and the second on December 10, 2008. The series was later adapted into drama CDs, and an anime series created by Studio Deen has also begun streaming online. On January 8, 2010, the anime series' international distribution was announced to be handled by Funimation Entertainment.
The main historical events portrayed in this work occur between World War I and World War II. The series often uses satire and comedy to address well-known and lesser-known historical facts alike. Historical political and military interaction between countries is represented in Hetalia as social and romantic interaction between the characters; the webcomic version in particular depicts military and economic incursions using various innuendo.