After the devastation of World War Two, the East and West split along the lines of democracy, capitalism, and communism. The Communist East drew a Iron Curtain along the border of East Germany. This is the beginning of the Cold War.
With most of Europe destroyed the US' new plan of containment and implementation of the Truman Doctrine led the US to begin the Marshall Plan. The US offered millions of dollars of economic assistance to the nations of Europe. Stalin forced the rest of the Warsaw Pact Nations to stay silent.
The East retaliated against the west for the Marshall Plan by encircling the city of Berlin, and stopping all food and supplies from entering the city. If the West couldn't supply the city somehow the people would starve and the city would fall to the east. Some in the West thought about using military force to open the blockade, however others thoguht that this could begin a nuclear war and there be massive retaliation from both sides, killing millions.
Eventually the US decided on Airlifting supplies to Berlin by the Berlin Airlift. Thousands of tons of supplies were brought in, until the East decided to give up.
The idea of massive retaliation prevented the nations of the East and West from actually engaging in conflict, and instead they fought "proxy" wars like in Korea between the communist North and capitalist South.
Eventually the South and North signed an armistice ending the war right around the 38th Parallel, now in an area called the DMZ.