War is the time period in which nations are considered enemies. War allow nations to attack each other, in war units and buildings receive attrition damage if they are present within the enemy nation's border, this can't be helped for building but units can receive protection from attrition damage with a Supply Wagon, however the attrition damage dealt is a lot less severe than the one delivered to units and building placed in a nation that is at Peace.
War allows nations to conquer each other cities and eliminate each other. Generally nations at War will always accept peace for the right price, with nations that are doing not going well accepting peace for free or accepting a demand of payment in exchange for ending the war, also a nation will usually seek to end war if it finds itself losing the war agaisnt another nation or if it finds itself in disadvantadge even offering to pay to end the war on their own initiative. Generally the more pooer a nation is the lower the price for peace will be. Usually a nation that has an advantadge in war will seek a higher price to accept peace, with large empires usually demanding exhorbitant ammounts of tribute to agree to end hostilities, enough to easily bankrupt the nation bidding for peace unless it is extremelly rich. Generally a good way to force nations into accepting peace for very cheap prices or even free is by destroying them with nuclear weapons.
Allies will go directly into war if they find themselves attacked by another ally. Though they can still accept peace and even another alliance even after being treasoned.
However oddly enough even though nations avoid conflict with stronger nations, nations that find themselves too overwhelmed by another nation or that another nation has grown too powerful, will declare war and will completely refuse to accept peace no matter how much the perceived threat offers, by stating "Your arrogant nation must be crushed before it is too late!", even if they are on exteme disadvantadge and conquest is a guarantee they will refuse to make peace. This also happens when only 2 nations remain in the map, though it is possible that the remaining nation is still open to peace and even an alliance (thus enabling the player to automatically win the game without a further conflict) if the other nation does not consider the player to be a threat. When nations are in that state, not even using nuclear weapons will force them to accept peace.
Also when a nation has resarched the World Government technology, all not allied nations will declare war upon that nation and it will be completely impossible for that nation to have peace unless it relinquish said technology (which can't be done without cheating). No matter what, when the World Government is researched all attempts to regain peace will be futile, even if exhorbitant ammounts of resources are offered or nuclear devastation is used to scare the enemies. Even if the enemy nation finds itself facing certain defeat, will refuse to accept peace. This odd behaivour is most likely because the World Government technology has extremelly lethal features like automatically allowing its beared to assimmilate cities, but specially because it allows the bearer to win the game automatically fulfilling certain conditions by reducing all timers to zero, also this feature allow the bearer in most modalities of the game to conquer any nation by simply taking its capital city. Making any nation with this technology extremelly dangerous to any nation lacking it.