The FAQs section should have a large number of answers, but I'll try my hand; please keep in mind though that this is a topic of HUGE controversy.
Long term, one of the key causes of the war was Kaiser Wilhelm II's Weltpolitik (World Policy). In short, Bismarck's Balance of Power/Alliance politics were to be discarded, in the name of claiming for Germany a territorial and political position as a World Power, which it was felt Germany deserved, being the youngest of the Great Powers and the greatest industrial power of Europe.
This lead to the First and Second Naval Laws of 1899-1901, which sort about building a massive war fleet, with the objective of challenging Britain's position on the world stage, and giving Germany the means to formulate a more aggressive foreign policy. It also lead to the Re-insurance Treaty with Russia not being renewed, prompting the French to seek an Alliance with Russia, off setting German military power. Germany meanwhile cosied up to Austria-Hungary (the Dual Alliance of 1879) and Italy, in the Triple Alliance.
Weltpolitik culminate with the First and Second Moroccan Crises, both of which stemmed from the French seeking to tighten their grip on Morocco, and the Germans responding with Brinkmanship, threatening a war to protect 'German interests'. The result of this was the Entente-Cordial of 1904, meant to end colonial rivalry between Britain and France, became somewhat stronger, eventually leading to military talks that hesitantly promised British support to France in the event of German attack.
In the east, Russia experienced Revolution in 1905, following g's disastrous defeat at Japanese hands in 1904-05, while the country was at the same time rapidly industrializing. By 1914, Russia would have the world's fifth largest economy, and was viewed in much the way that China and India are today, wit respect to their economic growth.
In the Balkans, the Ottoman Empire's grip was steadily declining. Taking advantage of this, an agreement was hatched in 1908 between the Austro-Hungarian and Russian foreign ministers in which Austria-Hungary would annex Bosnia-Herzegovina, while in turn supporting Russian aims to control the Turkish straits. The former took place, the latter did not, and the Serbs were also angered at not having been consulted, as they had aims on the territory as well. The crisis was defused by British, French and German intervention, but the German Chief of staff Helmuth von Moltke the Younger sent ominous telegrams to his opposite number in Vienna, promising unconditional support in the event of a war with Russia.
The Bosnian annexation only exacerbated problems that Austria-Hungary was having with it's nationalities, especially the South Slavs, Cezchs and Hungarians. Serbian nationalism was strong, an sought to unite ALL the south slavs under one banner, and an organization known as the Black Hand was formed by some Serbian officers, lead by Dragutin 'Apis' Dimitrievic, that began arming and financing Bosnian nationalists. Austrian fears of a 'Slavic conspiracy' directed from St. Petersburg reached a fever pitch with the Scutari Crisis of 1912. In 1911, Russia brokered a Balkan League of Serbia, Montenegro, Greece and Bulgaria, to conquer what remained of the Ottoman empire in Europe. The Empire had experienced a coup, by the so-called 'Young Turks', and this lead to major upheaval in the European territories. The First Balkan War ended in victory for the league, and Serbia occupied most of modern day Albania, gaining access to the Adriatic Sea.
Austria-Hungary protested, and mobilized against the Serbs; the occupation not only blocked Austrian aims for Albania, but it give the Serbs access to the sea, and thus easy communication with Russia. In the end, the crisis again was defused, and an Albanian state was established. Serbia still technically had access to the sea through Montenegro, and enlarged itself against Albania in the Second Balkan War, in 1913.
A key series of events took place in 1912-13, in Vienna and Berlin, that posed a danger for the future. On November 28th, Chancellor Theobald von Bethmann-Hollweg met with representatives from the German states in Berlin, informing them of the need to back Austria to h hilt against the Slav menace. The Germans were paranoid, in light of the Scutari and Second Moroccan Crises, of being 'encircled' by the 'Triple Entente'. In reality, this encirclement was incomplete, as Britain had 'understandings' with France and Russia, and none of the Entente members had ANY intention of war with Germany. Still, Moltke, Hollowed and the Kaiser were prepared for war. Unfortunately, on December 2nd Prince Lichnowsky, the ambassador to Britain, informed the Kaiser that were a situation eerily similar to July, 1914 to develop (ie Serbia v Austria v Russia v Germany v France), and France (and thus the European Balance of Power) threatened with domination by Germany, Britain would have no choice but to intervene. This lead to the Imperial War Council of December 8th, 1912, between the Kaiser and his military chiefs. Here a decision for war was NOT reached, as Fritz Fischer had suggested, but postponed; Germany would NOT see a war until it was ready, by summer, 1914. The Kiel Canal would be complete for the Navy, the upcoming Army Law would be in affect, and a press campaign portraying Russia as an enemy, and emphasizing the Alliance with Austria, would be in full swing.
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