Aberforth, in a fit of pique with his brother, never caught Severus eavesdropping and so Severus was able to hear the complete prophecy. Armed with this information the Dark Lord never attacked the Potters and Harry was never marked as the Chosen One. The Death Eaters, with Voldemort at their head, forced a confrontation with the Order of the Phoenix. In an attempt to stop the fighting Dumbledore challenged the Dark Lord to a duel and lost.

Now the Death Eaters are fully in charge of the Ministry, with Lucius Malfoy as the Minister. The Order of the Phoenix has been shattered and it's members are either captured or in hiding. The Wizarding world has been reformed along feudal lines, and the Muggle government has been infiltrated so that all of the U.K. is controlled by Voldemort.

Purebloods and Full-Bloods are now considered the nobility and upper class. They hold all the positions of power and responsibility. Half-Bloods are considered middle class, though it's possible for them to marry upwards. Muggle borns are sterilised when they are found and taken as slaves of the state.

Hogwarts continues as it was but is now under the guidance of Severus Snape, with several other Death Eaters on the faculty. Those teachers that didn't fight against the Dark Lord are still welcome to continue at their current posts. Half-Blood children are limited to five years of study and graduate after gaining their OWLs. Only Full and Pure-blooded children can take NEWTs.

The English government has declared martial law over 'increasing terrorist attacks' and travel to and from the islands is restricted. Voldemort and his followers want to consolidate their hold on the U.K. so they have a firm base of power before they try to expand across Europe.