Set after the return of the Jedi, The galaxy is still in conflict. The rebels won at endor, but the imperial fleet left. The executor didn't die either. Jedi who survived order 66 are joining the Rebellion since they have been contacted by Yoda. He told them to help out.
The Empire is run by Luke AKA Darth Krayt from Coruscant. He has Mara Jade as his sith apprentice. Some of the Imperials loyal to Palps are dead, having choosen not to serve Luke. Thrawn is Luke's primary grand admiral and his opinions carry alot of weight. Mara performs Vader's old Job.
The Rebellion has taken control of a third of the galaxy. They have all of the old separatists helping them. The rebellion is strongest in the outer rim. The Rebellion is strong and very active. Its acquired a large number of recruits and a considerable number of Imperial defectors. Several high ranking Admirals joined the Alliance. The Rebellion is also declaring itself into a new Republic.