The Book Thief is set in the context of the tense years in the late 1930's that eventually led up to WWII. To understand Germany during this time frame (1918-1939) it is also important to understand WWI and how it ended. How did Germany end up with a leader such as Adolf Hitler? Why was Germany intent on invading Austria? What was happening to German Jews before it happened in the invaded territories? Many of these questions are answered if we take a look at the end of WWI.
Germany was forced to accept the terms of the Treaty of Versailles that was signed at the conclusion of World War I. The terms of the agreement were harsh, but the Germans had little choice but to accept them.
Some of the terms of the Treaty included:
The reduction of the military to barely more than a police force
Acceptance of WWI as Germany's fault
Massive payments to foreign countries to cover the cost of the war
Payments to other countries were only made more painful by the outbreak of the Great Depression in 1929. These things made the current government look weak, and so when Adolf Hitler promised change and strength, the people gravitated toward him.