On the surface, Stardew Valley seems like a relaxing game made for cooling down after a stressful workday. Yet, the canonical war taking place outside of the valley has its roots deep in the lore of Stardew Valley and is anything but peaceful. The Ferngill Republic, the nation in which the bucolic Pelican Town is located, is at war with the Gotoro Empire, which is located south of the Gem Sea and Willy's fishing shop.
Other than a few facts and in-game hints, the war with the Gotoro Empire is a complete mystery. Almost everything related to the war is theory, deduced from clues and hints laced throughout Stardew Valley by the game's developer, ConcernedApe. Here's what we know for certain about the war so far.
Year Two's War Veteran, Kent
The little we do know comes from a few select character quotes and the mention of a mysterious character, Kent, who is the father of Sam and Vincent and husband to Jodi. In Year One, Kent is only mentioned briefly, with hints found in Jodi's house and through Sam and Vincent's heartbreaking mentions of their father.
However, in Year Two, Kent appears sporting a military jacket and a tough demeanor. He's been discharged from the war and is clearly suffering from Post-Traumatic Stress Disorder, something that comes up in his heart events and in conversations with his family after his return.
From Sam's quotes especially, we can surmise the Gotoro Empire is viewed as a ruthless foe from the Stardew side of the world. We can also infer from Sam that the war is being fought between relatively similar nations in terms of might because of his mention of high casualties on both sides. This means the war with the Gotoro Empire is quite bloody and destructive, even if the game doesn't go much into the effects on the Ferngill Republic as a whole.
Stardew Valley indicates the war is probably being fought outside of The Ferngill Republic. The general cheeriness amongst the Pelican Town population and the relative lack of information about the war makes it seem like the war isn't a big deal, which could point to the fact that it's occurring somewhere far away. Kent spent time in a Gotoro prison camp, which could also point towards this conclusion. The items on the Travelling Cart are also smuggled out of the Gotoro Empire, as referenced in text boxes when you open the shop's menu.
Other Theories
One of the prevailing fan theories is that the Gotoro Empire represents Imperial Japan. Evidence supporting this notes the dated use of the word "Empire" and also that Kent hates Sashimi, which is part of Japanese cuisine. When given an item he hates, Kent mentions it was given to him in a Gotoro prison camp. However, he also hates tortillas and loves Maki Rolls, which puts a slight damper on that theory.
It's also possible that the war has impacted livestock and seed prices in Stardew Valley. The war might have diverted resources away from high quality personal agriculture or made certain seeds less common. This could explain why you can buy a fiberglass fishing rod for the cost of two pizzas and change. It's also a little weird how you have access to highly advanced technology, such as the gem-replicating Crystalarium, and yet depend on Junimos to repair the town bus. The lack of technology available to the town could be due to the war demand.
It's very possible that the war required a draft of some kind, although the evidence isn't great. In World War II, 20% of the United States draft pool were drafted. And, because we don't actually know the ages of the villagers, it's possible every one of the males except the older Harvey and Elliot were too young to be drafted. Harvey would likely be exempt due to his profession. So it's possible Kent was the only one from the valley who was drafted. Despite this, none of the characters ever mention a fear of being conscripted, so the evidence points towards Kent's voluntary service over a draft.
Otherwise, there's a lot we don't know about the war, including how magic and just the nature of those in the Gotoro Empire. It's very possible they have some relation to the dwarves and shadow people seen throughout Stardew Valley, though. Still, the seemingly brutal war between the Ferngill Repbulic and the Gotor Empire casts a dark shadow over this tranquil farming simulator.