The story takes place several centuries in the future. Mankind has colonized the entire Solar System and beyond, and hardships such as war, disease, hunger, and overpopulation have been eliminated. However, boredom spread rapidly throughout the galaxy and as a result, interstellar war broke out. The two opposing factions were the Galactic Republic and the Rebels. While the Rebels eventually defeated the Galactic Republic because of their far greater numbers, the former were no better off; the aftermath of that war was a new Dark Age. Houses, plantations, and, more importantly, most books were destroyed in the war, and knowledge of interstellar travel was mostly lost, available only to a privileged few. Mankind, in the film, had made much progress, only to be rewarded with "third world" living conditions, despite people still possessing very advanced computers.

References:
https://en.wikipedia.org/wiki/The_Warlord:_Battle_for_the_Galaxy