The Continental System was a foreign-policy cornerstone of Napoleon I of France in his struggle against Great Britain. Napoleon was a great general, and could probably have defeated the British had he managed to land an army in England. However, he was quite afraid of the Royal Navy, particularly Horatio Nelson, and never risked a crossing of the English Channel. Napolen resorted instead to economic warfare. As a result of the Industrial Revolution, the British were emerging as Europe's manufacturing center, and were thus vulnerable to a trade embargo.
The Continental System was just such an embargo. In 1807 (?), having recently conquered or defeated every major power on the European continent, Napoleon forbade them from trading with the British. The embargo failed. Napoleon's exclusively land-based customs enforcers could not stop British smuggling, and British merchants aggressively sought out other markets. In fact, the Continental System caused more collateral damage to the nations of the "Grand Empire" than it did to Britain. Russia in particular chafed under the embargo, and in 1812, that country reopened trade with Britain. Napoleon raised the Grande Armée, a force of half a million men from across Europe, and invaded Russia.
War and Downfall
The Russian generals, fearful of Napoleon's vast force and legendary skill, resorted to the scorched earth policy, systematically retreating for hundreds of miles. It was a strategy of last resort, but it exploited two key weaknesses of the Grande Armée. First of all, Napoleon had a habit of living off the land and traveling light. Second, foreseeing a quick victory, he had failed to supply warm clothing for his troops. The Russian retreat lasted well into the winter, and the French could not glean enough from the ravaged countryside to support themselves. By the time of the key battles at the end of 1812, Napoleon's army had been reduced to approximately 100,000. The Russians were then able to turn the tide and drive Napoleon back across their border. Revolts sprung up in Prussia and Austria as the frontline advanced through those regions, and Napoleon was finally defeated in 1814.