When the Soviet Union collapsed, a number of former Soviet republics broke away. One of these was Georgia, which lies between Russia and Turkey, on the eastern shore of the Black Sea.
The break, however, was not clean. Two significant areas on the Georgian border with Russia never really accepted being parts of Georgia. One of these is South Ossetia, which is neither ethnically Russian nor ethnically Georgian; the majority of the population, about two thirds, are Ossetian, with the remaining third mostly Georgian. Most of the territory is held by Ossetian separatists. Russian, Georgian, and Ossetian are all different languages.
After the collapse of the Soviet Union, Georgia started dealing with the west as well as with Russia. Possibly as a result of this, Russia started quietly supporting South Ossetia in its independence efforts. More recently, Russia offered Russian citizenship to any South Ossetians who cared to take advantage of it, which many did.
Around the beginning of this month, one of the many flare ups between Georgian forces and Ossetian separatists started to escalate. Official Georgian forces moved in on Thursday, in what appeared to be a preplanned attack. Russian forces moved in on Friday, ostensibly to protect their new found citizens. Only then did the president of Georgia, Mikheil Saakashvili, call for a general mobilization of Georgian forces. If this was Georgia's way of starting a war, it was a bad way to start it.
Russia's preparations, however, have paid off pretty well. With a substantial fraction of South Ossetia's inhabitants now Russian citizens, they could probably occupy South Ossetia and annex it without much trouble from the rest of the world. After all, their military is about 50 times as big as Georgia's.
It looks like they may be thinking about bigger fish, however. They haven't restricted their military activities to South Ossetia; they are bombing targets in Georgia proper. From a power politics point of view, they may be trying to gauge whether they can get away with taking over all of Georgia without NATO intervention.
Unfortunately, the rest of the world hasn't thought in terms of power politics since the days of Kennedy and Nixon. The U.S. and western Europe just don't see the connection between Kosovo and South Ossetia that Russia does. There's very likely to be a miscommunication here, somewhere along the line - if not in Georgia, then in the Ukraine, Kazakhstan, or the Baltic States. With four of the world's five primary nuclear powers involved, a miscommunication could have disastrous consequences.