This network of alliances were honored in a very arbitrary way. The initial impetus of conflict was between Russia and Austrio-Hungary, regarding interference from both sides in independence movements in the Balkan states, in particular Bosnia and Serbia. Both Russia and Astrio-Hungary simultaneously desired more unified, stronger Balkan states in their favor, controlled by ethnic groups that had stronger affinity for their respective agendas in the region, and feared a power vacuum of small, weak, states that would enable such goals to be met by the other. Both governments, which were expansionist and autocratic, desired direct control of new independent states; in one example, at least, even, Austrio-Hungary attempted to establish an ethnically central European puppet government over certain regions. Both sides engaged in these political and military tactics, continuously trying to block an advantage to the other by interfering in the burgeoning independence movements. Ethnic and religious tension in the region, fuelled by Austrio-Hungary, Russian, and the Ottoman Empire also fuelled this. Ultimately, the assassination of Franz Ferdinand in Seeravejo was considered the "catalyst" largely because it represented a pinnacle of the political tension due to foreign interference in the region.

The way that the others were politically involved was due to the German political strategy of Realpolitik, favored by Chancellor Otto von Bismarck in the preceding years. The formation of the German state was a game changer in that suddenly national interest on a more global scale became a more fast paced game, since Bismarck was ruthless as the negociating table and his picking and choosing of allies. Bismarck was allied with Austrio-Hungary not for philosophical or historical reasons, but because the military might he created through industrialization and arms building permitted him to protect the on-the-verge collapse of Austrio-Hungary, to prop them up and prevent a vacuum of power not only in the Balkans but all the way up to the German border, which Russia would inevitably fill.

Historically, largely due to wars between France and Prussia, France had to negociate hard for a Russian detente, which became useful for Russia as Germany's military power grew due to the proximity of the two countries. Also having felt the bitter side of Bismarck's clever political tactics and in order to protect the stability of Europe and their maritime monopoly, Britain joined in an uneasy alliance with their historic nemesis, France.

With these alliances in place and the massive arms race to prevent an instant check mate by any of these major powers, each nation put in place an intricate military reaction plan, which was ultimately the plan executed to start World War I. In order to take territory, protect their allies, subdue their foes and their allies' foes, each nation had a very large scale force to assault and cripple the closest enemy in the region in order to provide the greatest advantage to an ally. Regardless of the source of conflict, military strategists were simultaneously aware and oblivious to the fact that any military action by a major power would be a global crisis. They created it, but they were also prepared to defend themselves and their allies in the event of it. This is feedback loop between politics and military planning is what Henry Kissinger described as the "Doomsday Machine."

So, back to the original point (this is a bit rambling, apologies), the origin of conflict was between Russia and Austrio-Hungary in the Balkans. At the first sign of instability, Austrio-Hungary posiltioned its forces. Russia had only one plan in place to respond, which it executed with a full military assault into the region, causing Austrio-Hungary to in turn respond with its full military capabilities. There was not a very good communication network in place to permit adaptability in the case of the small conflict this might have been. Due to the conditions of the alliances, Germany invaded France via Belgium, not because it was out for a land-grab, but because its military "job" as discussed with military strategists with Austrio-Hungary, was to paralyze interference from the West. In turn, England was forced to send aid, not only to prevent the collapse of France and risk their own interests, but also to play the part they were obligated to play.

So, why? Why all this? TL;DR: Balkans were a power vacuum everyone was afraid Russia would fill, so they prepared for the worst, because Russia scared everyone in the previous century.

The story, as they say, grew in the telling.

Germany had no real territorial ambitions, in fact the war from their point of view was simply to recognize their already-obvious economic, demographic and cultural importance. We could imagine the Central Powers ending the war early after some sharp fights for the status quo ante. A colony here, a border adjustment there, but not much.

But the war grew long and costly. By the time of the Russian Revolution, the Central Powers could and did demand much from the new Soviets. A series of buffer states and so on.

On the other hand, the Associated Powers were fighting to stave off the inevitable dawn of a new German epoch. They more-or-less wanted the balance of power to lie on a Paris-London axis rather than London-Berlin.

Austria-Hungary, often wrongly painted as a failed state, wanted dominion over the new states created by a collapsing Ottoman Empire. It is not clear they wanted the Balkans incorporated in their empire, but they most likely wanted the area recognized as their backyard.

Had the Germans collapsed early, it is imaginable (and there is no cite for this of course) they would have tried to impoverish Germany, or even break it up into its basic parts (Bavaria, Prussia and so on)

As the war grew longer, the Associated Powers saw little reason to settle for less when the Germans put out peace feelers. The Armistice demanded both military and economic surrender.

I am sure Mr. Turtledove et. al. could draw up a scenario for a less-fierce peace had the Germans won early, but there was no hope for moderation when so much had been lost by both sides.

The Ottomans were brought into the war by some clever German diplomacy and intrepidly by a number of naval officers. It is quite a story.

Bulgaria and Greece? They area still had unsettled boundaries. The minor states in the region saw WW1 as a continuation of the Serbian Wars. One side wanted (and still wants) a greater Serbia, the others objected.