The SimplePlanes Lore Part 2.

1800s-1900s.

Krakabloa Islands and Wright Islands are British colonies, both of them are controlled by the British Empire.

1900s-1950s.

World War I:
Both of the colonies participate in the war, most troops are organized in small foreign divisions, just like the Indians.

Interwar period:
An independence movement gains popularity in the colonies, and in 1934 both islands become an independent country called the Wright-Yeager Republic.

World War II:
A huge argument erupts between two parts of the republic, and the country splits in two: the Wright part joins the Allies, and the Yeager side joins the Axis. After realising that the Axis will lose the war, Yeager switches sides and joins the Allies. But, a part of Yeager still supports the Axis, and starts a separatist movement, which was nicknamed "bandit movement" by the Allies. This is the origin of the Bandit side of Krakabloa.

1950s-2000s.

Cold War
Both Wright and Yeager join NATO after WW2, but the Bandits choose to become part of the Soviet Union. That way, the Bandit side of Krakabloa is occupied by USSR. This leads to a huge conflict between Yeager and the Bandits, and a following violent civil war, with NATO being on the Yeager side, and the USSR being on the Bandit side.

The cooldown
After having understood that both sides are in a stalemate, the USSR stops funding the Bandits, due to the lack of any results. But, because of a solid amount of vehicles still left on the Bandit territory, the separatists decide to fight on their own. Meanwhile, the Yeager Republic, after hearing the news, decided to take back half of the central island that was controlled by the Bandits. Having succeeded, the Yeager stops attacking, and puts a border with extra protection on the central island. The conflict is still unresolved, but has reached a relatively calm point.

P.S.: this is connected a bit to tsampoy's lore post, but I added some of my own stories.