Mostly to do with Russia. Recall when the Soviet Empire fell in 1989 and the immediate aftermath of its occurrence. Russia was promised (by the realists like Scowcroft of George HW Bush’s administration) that NATO would not expand East. And recall that the Soviet sphere covered all the way to East Germany.
Well obviously that didn’t take. First to go of course was German unification. Then Russia gave up Central Europe (Hungary, Czechs, Slovaks, Poles). Next Russia ceded the Baltics (ok, they still got a pro-Russian dictator in Belarus!!!). There was the ham fisted cyber war against the e-government of Estonia as the last gasp of influence in the region.
Continuing the trend, the Russians lost the Balkans having backed the losers (Serbs) and were unable to stop the eventual train to Kosovo independence. And again minus some balking and some abortive cyberwarfare attempts, Russia accedes to all of that loss of influence. Hell even Serbia is working hard to make themselves able to gain EU membership.
Russia also had the hugely face-losing moment in the early 1990s of Western backed Economic Shock Therapy (see Naomi Klein’s book on the subject). The rest of the developing world as a result looks to China not Russia for economic/political guidance (i.e. how to open your markets and keep one party rule/stay in power). Russia now seems to be taking a dangerous, more militaristic inspired path (plus the playing of petropolitics particularly vis a vis Europe and the Iranian nuclear issue).
Then comes the next inner core, what Thomas Barnett calls GUAM: Georgia, Ukraine, Azerbaijan/Armenia, Moldova.
The GU pair of the quartet is where the Russians are making their stand. Particularly now the former. They are also are feeling of their oats after two decades of decline and humiliations.
Of those four, the two As so far seem closer to the Russian sphere (Moldova is mostly neutral), while Georgia and Ukraine both have majority pro-Western populations with large rump pro-Russian populations. Russia recall was involved in trying to back the (what appeared to be) vote rigging in the Ukranian elections (backing Yanukovich over Yukashenko).
So the line has clearly become Ukraine and now more dangerously Georgia. Both wanted into NATO and both were put on hold because of fear of domestic illiberality (both Saakasvili and even Yushchenko have had their marital law like episodes and are involved in their own political shenanigans it seems) as well as the obvious point of pissing off Russia and not wanting to get in a fight with Russia over these countries.
Not only that but the US is attempting to shore up relations with the Central Asian “istan” [former Soviet] republicans. Russia sees NATO undertake a mission outside of Europe, in its own former sphere/Vietnam (Afghanistan). Then the US wants Russia in on Iranian embargoes and the like. And now you see the Russians starting like they are being encircled and dictated to. The Russians see NATO increasingly as an anti-Russian alliance and their fears I think are pushing them in a direction of a self-fulfilling prophecy.
Update I: I was assuming in my mind, but I realize I didn’t make explicit, that part of what is going on is Saak’s absolutely reckless (possibly immoral) stupidity in the initial round of escalation. That of course does not excuse Putin’s equally (even worse) further escalation–beyond simply South Ossetia into non-disputed Georgian territory. And civilians are getting killed as a result.