The Principality of Karlsburgh is a mammoth, socially progressive nation, ruled by Prince Karl VI with an even hand, and remarkable for its museums and concert halls, infamous sell-swords, and devotion to social welfare. The compassionate population of 6.1 billion Karlsburghians enjoy extensive civil freedoms, particularly in social issues, while business tends to be more regulated.

The enormous government juggles the competing demands of Education, Welfare, and Environment. It meets to discuss matters of state in the capital city of Karlsburgh. The average income tax rate is 78.0%, and even higher for the wealthy.

The frighteningly efficient Karlsburghian economy, worth 577 trillion Karls a year, is driven entirely by a combination of government and state-owned industry, with private enterprise illegal. The industrial sector, which is quite specialized, is led by the Tourism industry, with significant contributions from Information Technology, Pizza Delivery, and Book Publishing. Average income is 94,739 Karls, and distributed extremely evenly, with little difference between the richest and poorest citizens.

Voters must decide whether to go number one or number two, hundreds of subterranean tunnels are being built as part of "Project Morlock", re-education centers are being added to most prisons, and the Smalltopian embassy doubles as an electoral campaign headquarters. Crime, especially youth-related, is totally unknown, thanks to a well-funded police force and progressive social policies in education and welfare. Karlsburgh's national animal is the Sloth, which frolics freely in the nation's many lush forests, and its national religion is Atheism.

Karlsburgh is ranked 8,476^th in the world and 227^th in the South Pacific for Most Eco-Friendly Governments, scoring 6,181.88 on the Dolphin Recycling Awareness Index.