Alzma is an island nation located in the Baltic states. It is ruled by the communist dictator Volvo Glesgov. Before and during the early stages of Rico's arrival, there was a civil war going on between the government, the democratic third eye and the neo-Nazi/fascist iron hand.
Battle of Dazmul.
Dazmul is the capital of Alzma and is located on the biggest island in the region, located in the north of Alzma. This were the battle of Dazmul occurred. The battle was between the third eye (led by Rico) and the Alzma military. However, in the later stages of the battle the Iron Hand joined in an attempt to seize the capital, it failed.
However, the battle was a diversion so Rico and Jack (The new protagonist) could attack Volvo's mansion and kill him. This was also done so Jack could save his sister Jill who had been forced to become one of Volvo's maids and was going to be sent to Volvo's brother when he escaped in a private jet. Rico and Jack failed to kill him in his mansion before he escaped to his airfield via a helicopter and escape in the jet.
However Sheldon gave Rico and Jack a fighter jet to chase down the plane and they both managed to get on board. They managed to kill Volvo's top ranking general but were forced to get off with Jill because Volvo threatened to blow up the plane with trezium. However, Jack put a planted explosive on the plane and blew it up, killing Volvo! Jack, Rico and Jill are saved by Rico's brother, Mario, after Rico and Jack's parachutes and wingsuits are burned by the trezium due to it's incendenery properties.
After the battle the duo went to destroy the iron hand with the help of the third eye. After a ferocious battle between the two factions the Iron hand leader is killed but before he dies he says to Rico and Jack " There's more then meets the eye to, well, the third eye." The duo then set off to the third eye base (south island, where Rico landed and meet Jack) but are attacked by them for some reason. They escape after an epic car chase and are told by Sheldon that the third eye is a front for the Illuminati who want to take over Alzma and use it's trezium to start world war 3 and create a new world order after the world has been weakened in the war. Tom then tells them that they have to choose one of the four different terrorist/resistance factions in a meeting and then lead them against the new government.
Trezium is a material only found in Alzma. It is highly flammable and have a large radius, meaning it can scorch an area for miles. Obviously, the Alzma government, being communist, decided to utilize it for warfare purpose. They had nearly perfected it before Rico arrived, with the aforementioned dictator remover ruining the project. The illuminati were forced to use what was the closet to perfect formula of trezium refining. It is almost inevitable that they will sell it to other, more destructive, country's which would probably lead to a third world war.
After the Illuminati takeover Rico and Jack go to east islands (val krig) to have a meeting with three different resistance groups (Democratic, anarchist, communist and Islamic) and they (you) must pick one of the groups to lead against the government. However, the opposite of the group you chose (pick=democratic, enemy=communist) and you will have to fight them at certain points in the story and random points on the map.
Conversion of legkiy.
After the Illuminati took over Alzma they the west island, Val Legkiy, there main base of operation. Almost all of the town and city were either fully or at least half converted into more industrial locations (with eerie parallels to combine architecture from half life 2) act more as army base's, outpost, quarry's (with slave labour of course) and port's. They constructed a massive skyscraper like structure called the Triad pillar which became there main base. No one on the island was untouched, either being forced to join the army, police or similar jobs, or forced into slave labour.