Wallace attempts to enter the Eurovision Song Contest 2006 with a song called "Stop the Muggin', Start the Huggin'". In an attempt to officially become a country, he travels to New York to try to win the support of the United Nations. The lack of a territory lets him down. This final episode ends with a gathering of citizens in Leicester Square, where Wallace reveals that the country is to be called Lovely.

When he struggles to pay his electricity bill, Wallace begins to kick-start his country's economy. He investigates the National Debt, with advice from former Chancellor of the Exchequer Kenneth Clarke. He designs his own currency, the IOU (Interdependent Occupational Unit), which he shows to Andrew Bailey, the Chief Cashier at the Bank of England. He also discovers the Principality of New Utopia and interviews the UK Pro Consul, Tony Nicodemous. He applies for international aid, and fails, due to the wealth of his citizens.

Wallace visits two very different 'utopian' communities, the planned town of Celebration which maintains its pleasantness through strict rules and regulations, and the anarchic self governing neighbourhood of Christiania. He also speaks to a Catholic Cardinal about the role of religion in society and to Sheriff Joe Arpaio about law and order. A sombre visit to death row and an interview with a death row prisoner leads him to decide against the death penalty in his country.

Danny Wallace meets the SAS (Second amandment sisters) and meets the King of Fusa. He also goes to The Principality of Seborga.

With the help of an advertising agency, Wallace chooses a design for the flag of his country. He records a national anthem, which is played during his interview on Iain Lee's LBC show.

Wallace investigates territory for his proposed country, beginning by visiting Sealand. He meets the man who owns the Moon, he "invades" Eel Pie Island but leaves his post of "leader" when the Police are called. He makes friends with the Major General of the British Army. He eventually decides upon the area of his flat as the Territory and makes a declaration of Independence which he gives to Tony Blair.