The Mouse That Roared

This is technically an alternative-history story with a slight touch of science fiction. But it may be more helpful to describe it as a delightful non-magical fantasy about the international adventures of a tiny fictional European country, which decides that it needs a new source of money, thinks of a crazy plan, and ends up in a situation that no-one expected.

The Duchy of Grand Fenwick is technologically retarded and exports only wine, but can't produce enough of it to support its growing population. Its plan is to go to war with the United States and lose, because the United States has the weird habit of sending aid to its defeated enemies. Through a bizarre chain of events, in effect it wins the war, and then has to cope with the effects of its victory.

The first 62% of the book is the best, introducing Grand Fenwick and its people, then telling the wonderful and hilarious story of the war. The rest is a sort of extended epilogue, about the aftereffects. But the whole story has considerable charm and humour, and also considers serious questions of morality, international relations, and weapons of mass destruction.

Its main flaw is that it's dated: it was first published in 1955. This doesn't really matter in Grand Fenwick, which lives in the past anyway, but it's evident in the parts describing the United States and other countries.