Earth, the homeworld and capital of humanity, was enjoying a new golden age before the Reapers attacked. Disease, pollution, and other social ills were on the decline thanks to technological advances and a wealth of resources from the colonies. Earth was an inspiration even to alien cultures, resulting in influence out of proportion with humanity's brief time on the galactic stage.
The Reaper attack has put an end to any semblance of this former life. The great cities of Earth are storehouses of human DNA for the Reapers to harvest. Reaper gunships, capable of megaton-scale firepower, annihilated industrial centers in seconds. The militaries of Earth's disparate nation-states have retained only partial communication with the Systems Alliance fleets, leaving the planet's resistance efforts uncoordinated and vulnerable. The loss of the comm-buoy network has cut off Earth's economy from the rest of the galaxy, sending shockwaves across galactic markets--and a significant obstacle to receiving aid.
The Systems Alliance is an independent supranational government representing the interests of humanity as a whole. The Alliance is responsible for the governance and defense of all extra-solar colonies and stations.
The Alliance grew out of the various nation space programs as a matter of practicality. Sol's planets had been explored and exploited through piecemeal nation efforts. The expense of colonizing entire new solar systems could not be met by any one country. With humans knowing that alien contact was inevitable, there was enough political will to jointly fund an international effort.
Still, the Alliance was often disregarded by those on Earth until the First Contact War. While the national governments dithered and bickered over who should lead the effort to liberate Shanxi, the Alliance fleet struck decisively. Post-War public approval gave the Alliance the credibility to establish its own Parliament and become the galactic face of humanity.