I am only mildly/moderately involved in the game, but this is what I have to say.
It starts off as a 100% historically accurate world gamemap, with thousands of territories and a few hundred nations (most in Europe). From there on it deviates from history. There are several different dimensions of this game - Religious, Diplomatic, Technological, Colonial, Economic, and Military.
You have 6 types of characters to do "work" Diplomats, Merchants, Colonists, Magistrates, Priests and Spies. Diplomats start/end wars, negotiate for loans, gifts, embargoes, royal marriages, etc. Merchants go to a center of trade and compete for a share of the market. Colonists can establish a colony on unsettled land (I usually kill the natives there first, else they can destroy your colony). Magistrates are used to build improvements in provinces, (there are 6 categories corresponding to tech categories). Priests are used to try and convert a territory or win favor with the Pope. Spies can be used to support revolts, assassinate advisors, etc.
You can use your money from taxes (after paying interest on loans, upkeep for military, colonists, and priests) to invest in a few tech areas: Government, Production, Trade, Army, Navy, Stability, or you can just put it back into your treasury (at the cost of high inflation).
Attacking nations and taking territories earns you infamy and too much can lead to other nations attacking you. Stability and legitimacy are important too, as mismanagement of this increases revolt risk and lowers the taxes you collect.
And that's just a taste. So much more. You can micromanage the hell out of the game if you wish.