To best answer this question in an exam-style setting I would opt for a thematic approach. By firstly examining the entangled web of alliances that emerged in Europe at the end of the 19th Century, one can begin to understand the rising tensions of the major powers. The increasingly hostile relationship between Germany and France together with instability and strong nationalist sentiment in the Balkans put Europe on a slippery slope towards war. As a result, a number of crises emerged, including the Morrocan and Bosnian crises and the Balkan wars. Another long-term factor crucial to the outbreak of war was imperialism and the manner in which this increased mutual suspicion of all parties involved.
Short-term factors include militarism and the July Crisis in 1914. German foreign policy or 'Weltpolitik' increasingly came into conflict with British naval interests. Thus an attempt to build up naval arms developed into a fully formed arms race. The July Crisis then came as a sort of 'trigger' event in causing the outbreak of World War One. Due to the entangled European alliances, a chain reaction followed the assassination of Archduke Franz Ferdinand. Germany's blank cheque finally ensured the European powers were heading for war.