The year is 2065. For solving this puzzle, you may assume that no significant changes have been made in political and geographical situations in Europe and Africa except for those that are described in the question.
One country X in Europe started expanding its area. Occupying the neighbouring country was hard, but that country bordered one that was easy to occupy for a part because it could not finance an own army and other countries refused to help despite some treaties. However, the country was never occupied in full.
One country Y in Africa also started expanding its area and occupied an neighbouring country. Now countries X and Y both border the Mediterranean Sea. They start a war between each other. Now finally an international organisation steps in. They decide that there will be a war on sea between two large ships, and that the country that wins, will win the war.
The flags of countries are of course present on the ship. During this battle, country X manages to let the boat of country Y sink by a technique that was present in one of the occupied territories for over a thousand years. The territory of country Y and is given to country X. Many artists made their impression of the war. However, later people thought that the war that was fought was actually a civil war in country X.
This should be enough information to figure out what countries X and Y are [remember, all countries have still the same name as they have now excepted for the occupied territories], and why people later thought that the war was a civil war in country X.