I know a lot of you don't know about the video game this is based on, but to understand the plot of the series you must understand the game.
Since the manga is over, I won't put spoilers tags so be warned!
Explaining Heart no Kuni no Alice
A little general knowledge
First of all, Heart no Kuni no Alice is an otome game made by QuinRose. For those who don't know what otome game means, it's a girl dating game. The manga is an adaptation of this video game.
There are two sequels to Heart. Clover and Joker (There's also a remake of the first one; Anniversary)
Sadly, those games are not available in English. There's no American version nor English patch available on internet. If you want to play, you have to understand Japanese or play with some translating tools (like I did).
Second, Hoshino Soumei screwed a lot of things in her interpretation in this manga. The character doesn't even have their rightful personalities, and the ending has nothing to do with any of the game routes... The manga dropped a lot of important things and only put some hints here and there, creating a lot more confusion than needed.
People who played the video game will tell you, the manga is far from doing justice to the original story. That's why my explanations will be based mostly on the video game.
The different mangas
Who the hell is Joker?
There are some people who are confused about the bonus chapter that is in volume 4. That's a bonus and it was made to promote the 3rd game. This chapter has no relation with the rest of the manga we read here except that's it's from the same series of video games. That's why we see Pierce, Gray and Joker in those pages but they are not mentioned ever again here. This bonus can also be a teaser for an upcoming manga, but I'll elaborate on it later.
A sequel for Heart manga?
Some of you heard about the few volumes called Clover no Kuni no Alice but those volume are not sequels for the manga. I know that's confusing since the sequel of the video game is called Clover but you have to distinguish the games, the mangas and the relations between them.
Those volumes are "one shot" based on the game Clover and are not sequels of the manga. They each contain story of different Alice pairings. They are made by various artist and, if I'm right, QuinRose decide of the next pairing based on popularity polls.
There is a new Alice manga that is planned but that's not a direct sequel either. It'll be based on Joker no Kuni. So you can think of the bonus chapter in volume 4 as a teaser for this. I read somewhere that the mangaka won't be Hoshino Soumei, so expect some changes in the drawing style and another kind of storytelling
Someone asked in another thread if another manga called : "Heart no Kuni no Alice - My Fanatic Rabbit" is a sequel for the manga here. No. This volume is just like the Clover no Kuni ones; it's a one-shot.
Just so you know, as of now, there is NO SEQUEL to the manga we read here.
[End of EDIT]
Now, onto the story!
This part of my post will mostly be based on what happened in the video game Heart no Kuni, because in contrary with the manga, the game actually gives explanations.
What happened before the game
Alice and her family (mostly her sister)
Alice loved her sister Lorinna and she spent Sunday afternoons with her. When their mom died, their father became a workaholic to forget his suffering. Their little sister (Edith?) blamed Alice for not crying at the funerals. So Alice was only comforted by her big sis. However, Lorinna was ill.
When Alice finishes her college studies, she wants to move from the familial house. She had an arguments with Lorinna because of that. When Lorinna died of her illness, Alice blamed herself because of their argument that caused Lorrina condition to get worst. After her sister death, Alice suffered a lot but kept on cherishing the Sunday afternoons she spent with her.
Alice love life
Alice was in love with her "teacher" (or tutor) that is the man who share the same face as Blood. This man was in love with Lorinna but dated Alice anyway.
When Lorinna died, this man could not bear the pain so he left Alice and focused on is work. This reminded her so much of her father when her mom died that she couldn't restrain him from leaving. For her this form of love is pure love.
Little precision about Lorinna's death.
Some of you thought Lorinna was killed by Joker. That wrong! The people who guessed that saw some CGs from Joker no Kuni (or the opening for this video game) in which we see Joker pointing a gun at Lorinna and shooting, but that's only a set up made by him to play with Alice's mind (I don't know the exact reason since I didn't play this game). That's an illusion.
In short: Alice graduated from college, she is in her mid twenties, her sister is dead and the man she loved left her.
Then why is Alice younger than what she really is in the game/manga?
Because at the very beginning of the video game/manga she is dreaming of her younger self who is spending time with her beloved sister.
What is "Wonderland" and why Alice got there
Wonderland is not a dream world like Alice think it is. That's a parallel world to the real one. Its existence, its rules and its mechanisms exist outside of Alice's imagination.
Why is she persuaded that's a dream?
First, to enter "Wonderland" she has to be asleep (and therefore dreaming). Nightmare could only make a connection between the two world for her when she is dreaming.
She thinks "Wonderland" is all a dream because Nightmare told her that, so she could be more comfortable. The others (example : Julius) just went along with it.
Why is she there?
As to the reason Peter brought her in "Wonderland", it was because he was concerned about her happiness.
She was suffering because of the death of her sister so he wanted her to forget the reality and be just happy. This also explain why she must not remember to stay in the Heart country. If she comes to remember what happened in the real world, her sense of responsibility would force her to leave, just like she did at the end of the manga, but with no way to come back.
Is there a different "Wonderland" for everyone?
No. Like I said, this world exists on it's own, it's not a part of Alice's imagination and it was not created solely for the purpose of her exiting reality. Foreigner are rare, but it never said that there can't be more than one at the same time. If someone else entered the Heart country, every role holder would be the same, only the perception the foreigner have of them would be different. In short, there is only one country of Heart that stay the same whoever gets in.
About the role holders and "Wonderland" inhabitants
The role holders are all a "face" on the clock. The each represent an hour. It's not said exactly who is what but we know for sure they represent hours.
The faceless too represent time, but minor amount like minutes or seconds. That's why they have no face, because they are less significant than the role holders.
Everyone is disposable because time is a cycle. The clocks for hearts that can be repaired is a representation of passing time. The same "hour" can happen twice and be different, just like the people living in "Wonderland" can have their clock repaired and their role replaced.
In Peter's case, in the video game true ending, it is said he represents an hour in the time Alice spent with her sister. People often makes the mistake to generalize and refer to him only as "Sunday afternoon" (heck, even I did it XD) but we do so only because QuinRose never said exactly what hour he is. Moreover, Alice never said exactly which hour she spent with her sister.
To clear things up even more: let's say he represent 3 o'clock, that means he represent every 3 o'clock, AM or PM, in every day of the week. This is not only bound to Alice's 3 o'clock but every 3 o'clock of everyone in the world.
His obsession with Alice can be explained because she is always thinking about this precise portion of time. So when Peter said to Alice that she likes him he wasn't totally wrong. She love the time he represents. Alice reminiscing her time with her sister is also what links her with Peter and what brought him to love her and care for her happiness.
If Alice didn't imagine all this, why does blood have the exact same face as her ex?
It's Nightmare who decided of this. He wanted to give her an incentive to stay and he thought to give it to Blood because his personality is very different from her ex. He did that to expand the chances of her staying and for his own amusement at the same time.
Nightmare only has the power to twist how Alice sees the role holders faces. He didn't change Blood's face, but only how Alice sees it. Moreover, he can't change the personality nor the behaviour of the other people. Keep in mind that all role holders are nothing more than players. If he had this kind of powers, he would be some kind of game master, but we don't even know if there is one.
I dug through the older threads and found a little gold mine of information.
Understand the Alice series - Character info, game/manga differences ~ By kahoyukimura
(See next post for the rest)