Bowser, tired of being defeated, teams up with many of the other villains in the Mushroom World and they launch a direct attack on the Mushroom Kingdom. They easily take it over, and take all of the heroes hostage. They then proceed to easily take over the rest of the world. Each of the villains split up to defend a different area. Mario manages to escape from the villains, and begins to launch his counter-attack.
The game's levels are sorted into chapters, and further sorted into sub-chapters. Each sub-chapter contains four levels. The first three levels are standard levels where the player has to reach the goal, and the fourth level is a boss fight with one of Bowser's allies. After defeating all four of the bosses in a chapter, the boss of the chapter is unlocked. After defeating that boss, the chapter becomes "liberated" and any of the levels in that chapter can be freely replayed at any time.
The Mushroom Kingdom was originally inhabited mostly by Toads. Since it's invasion toads are a labor force, while the minority population that also inhabit the Koopa Kingdom are still civilians.
The Koopa Village has been taken over by the Koopa Bros. Red Ninjakoopa controls the Koopa Bros. Fortress, Green Ninjakoopa controls the central village, Yellow Ninjakoopa controls the Village Outskirts, and Black Ninjakoopa controls the Fuzzy Forest. After liberating the Koopa Village, you also unlock Kooper.
Rogueport is a major port in the Mushroom Kingdom. The Main city is ruled by two rival crime organizations, the Robbo Gang and the Pianta Syndicate. The Docks are blockaded by the Navy, led by Flavio, in which you have to take your own ship and defeat the navy. Hidden in the sewers is a small part of the X-nauts, but led by Lord Crump.
Petal Meadows is a large meadow of flowers, a very peaceful place, so peaceful a small village was made by it. Shwonk Fortress is ruled by a Thwomp named Shhwonk, making it more puzzle-based than other levels. Gold Fuzzy and his army control the Hooktail Castle. King Nibbler (a giant Nibble) controls Petalburg and the river. The rest of the Meadow is ruled by Gold Cleft, a gold bald cleft
The Capital of the Mushroom Kingdom. It's controlled by the Shroobs, who have taken the town over, and built a wall around the city. To break through the wall, you must have to use Bullet Bill Blasters to break down the wall and destroy enemy Shroob cannons led by Commander Shroob. Princess Shroob controls the East Castle Gardens. Elder Princess Shroob controls the West Castle Gardens. The Commander Shroob controls the main plaza.