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 neighborhood of Christiania.
He designs his own currency, the IOU (Interdependent Occupational Unit), which he shows to Andrew Bailey, the Chief Cashier at the Bank of England.
This final episode ends with a gathering of citizens in Leicester Square, where Wallace reveals that the country is to be called "Lovely".
A show called Citizen TV, also presented by Danny Wallace, was shown to digital viewers after each episode, giving news and discussions about the country.
After speaking to several people including the leaders of Sealand and Dennis Hope, who claims to own the Moon, Wallace declared his flat to be a sovereign nation on 1 January 2005 and he set about populating the micronation and recording the television series.
Other notable interviewees included democracy advocate Noam Chomsky, Sheriff Joe Arpaio of Maricopa County, Arizona, Giorgio Carbone, Prince of Seborga, Major General Andrew Graham and Erwin Strauss, author of the guidebook How to Start Your Own Country.
An early political change occurred when Wallace fired his first foreign minister live on-air and appointed citizen Kieran Collins in his place.
Wallace then submitted his song to the BBC (which is an EBU member who supports the UK entry to the contest), in an attempt to receive their backing – their judges, however, were unimpressed.
The series also showed Wallace's attempts to gain official recognition for Lovely at the United Nations, which was established to be the true mark of statehood.
On Wallace's website, he describes the show as gaining "an almost-too-loyal fanbase, several of whom take against me when I am unable to dedicate my entire life to running a small country from my flat.