SWG as a game is set somewhere between episode 4 and 5. The first deathstar was destroyed, the rebels are hiding their asses on hoth and the galactic empire are shortly before striking back. Or to go with the old ingame text scroller after the initial Star Wars Logo and music kick in:
STAR WARS GALAXIES
An Empire Divided
It is the height of the Galactic Civil War.
Although the Rebel Alliance has destroyed
the dreaded Death Star, the Emperor still
holds thousands of systems in his grip.
Throughout the galaxy, brave adventurers
struggle to restore peace, while smugglers,
bounty hunters and crime lords prosper
amid the chaos.
Meanwhile, in the Outer Rim of the galaxy,
one of Darth Vader's Imperial-class Star
Destroyers has captured a passenger freighter
on suspicion of harboring criminals...