Recently we seem to have accumulated a number of nations that are on the wrong side of site policy on "malicious" content. Our policy is kind of subtle, and moderators tend to give players the benefit of the doubt, so some nations have been sliding through when they really shouldn't have, until we've wound up with quite a few of them. We are about to correct this.
As per the FAQ, we don't permit content that is obscene, illegal, threatening, malicious, defamatory, or spam. The "malicious" category includes material that a reasonable person would believe endorses or celebrates violence against real-life people.
It's fairly clear how this applies to forum posts, but can be ambiguous when it comes to nation pages--in particular, nations that refer to the real world. An example is the use of a swastika as a national flag. The swastika isn't specifically banned on NationStates, because we don't ban particular references or arrangements of pixels. But since it is widely seen to symbolize specific real-life events--in particular, the Holocaust--it is usually unacceptable, as an endorsement of violence against real-life people. (This is regardless of how it's intended: We don't try to peer into minds to judge intent, only how it appears.)
Similarly, there is no ban on mentioning Nazis, or Hitler, or espousing ideological beliefs. However, a nation made up as a cookie-cutter Nazi Germany in its name, region, and custom fields (e.g. motto, currency), with no contrary context or redeeming content, is hard to interpret as anything other than an endorsement of that real-life nation's most well-known acts. So this is unacceptable, too. This is the kind of content that has been getting through lately, and shouldn't have.
I'm using Nazi examples because that's what we've seen recently, but it applies equally to any theme or organization that's primarily known for violence for against real-life people. And conversely, it's perfectly fine for a nation to reference Nazis, if that's done in a way that isn't likely to make reasonable people think it's endorsing the Holocaust.
A common question is why we don't ban nations that mimic the Soviet Union, or the USA, or some other real-life nation/entity with a violent history. Certainly, you can total up the body count of various real-world countries and arrive at awful totals: the Soviet Union under Stalin, for example. The question we ask is whether a mini-Soviet Union nation appears to celebrate violence against RL people. And the answer is probably no: assuming no specific references to the contrary, most people wouldn't make that association, because the Soviet Union is widely known for much more than butchery.
We judge nation pages in isolation, since the typical viewer is not going to hunt down forum posts or regional activity for clarifying context. So while parody nations are fine, that needs to be reasonably obvious from the nation page alone.
In summary, there's only a problem if we think a reasonable person looking at a nation page will think it's endorsing violence against real-life people. We are not crazy-strict about this. We are fairly sensitive to satire and humor. But when a nation appears to be simply rocking out to how cool it was for real-life country X to kill a bunch of people, we will delete that nation.
Update May 16, 2021: A minor change to the above means we now require nation/region names to avoid violating this rule no matter what their flag or custom fields might be. That is, the name alone must not give the impression of celebrating or endorsing real-life violence. Previously, we would sometimes consider problematic names to be acceptable if they were accompanied by flags and/or custom fields that established a benign context, but this is no longer the case.
