Explain the structure of the European alliance system on the eve of World War I. Who were the member nations of the Central Powers and of the Allied Powers?

The alliance system came about in the late nineteenth and early twentieth centuries as a response to German unification in 1870. Germany's emergence as a powerful nation upset the European balance of power and led to British concern about losing its superpower status, especially as the Germans took more and more steps to challenge Britain's formerly unrivaled naval dominance. Further, the French endured the loss of the Franco-Prussian war and feared further attacks by the Germans.
Because Great Britain worried about German aggression, it entered into an alliance with its traditional enemy, France. It ended up allied with Russia, too, for Russia, also fearing a German attack, allied with France. Russia also backed Serbia against the Austro-Hungarian desire to crush it. The Balkans states were contested areas that both Russia and Austria-Hungary wished to control, while these states wanted independence from both powers.
Realizing that other countries were forming alliances to contain Germany, the German government entered into an alliance with Austria-Hungary. Germany feared it would be attacked on two fronts—from France in the west and Russia in the east—and thus "pinched" between them. Therefore, it sought Austro-Hungarian support in case of attack and began to build up its military. Germany's military build-up, naturally, motivated its rivals to increase the size and scope of their own militaries.
The Central Powers initially were Germany, Austria-Hungary, and Italy (which declared itself neutral at the start of World War I), and they were joined by the Ottoman Empire in 1914 and Bulgaria in 1915 during World War I. The Allies, or Triple Entente, included Great Britain, France, and Russia. These powerful countries were joined by Serbia, Romania, Greece, Montenegro, and Belgium as associate members.
This system of alliances, along with the increased military build-up in the late nineteenth and early years of the twentieth century, was a tinderbox that spread war across the continent in 1914. What could have been a localized conflict between Serbia and Austria-Hungary after Serbian rebels assassinated Archduke Ferdinand grew into a tragic and wasteful world war because Germany felt compelled by its alliance to support Austria-Hungary, while France, Russia, and Great Britain felt compelled to support their ally Serbia. This domino effect of alliances eventually dragged much of the world into this war.