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Dont freak out JagdPanther, the old japanese government is also portrayed as far from good. According to a sound episode japan used to use its economic power to screw other nations over and enrich itself and when it tried to do that to brittania it got screwed. At first glance it may appear that the series is biased to show the japanese as good people being opressed by the bad britannians but lets not forget that the main character is a britannian! Furthermore many japanese in the show are terrorists! I would argue that the reason that japan is where the show takes place is because the shows creators are japanese and so have the most knowledge about the area in and surrounding japan and that makes it easier to create material for the show.
Code Geass takes place in an alternate universe where the american colonies lost the american revolution and brittain became way more monarchichal(if thats a word) continuing to conquer and subjugate other peoples. Of course there is debate about where the seat of brittanian power currently lies, and if its in north america or still on the british isles.
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