In part 1 of the book and in chapter "the kiss"
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Himmel is a relatively poor street. Some of the neighbors include Rudy Steiner, one of six who lives next door to the Hubermanns; Frau Diller, a staunch Aryan cornershop owner; Tommy Muller, a twitchy kid suffering from ear infections; and Pfiffikus, a vulgar man. The neighborhood kids play soccer with garbage cans for goals, and Liesel is made to be goalie (replacing Tommy). Rudy confidently fires a shot, but Liesel blocks it; in response Rudy hits Liesel with a snowball.
Rudy is made to walk Liesel to school, and he takes a liking to her. He explains that Frau Diller is so committed to the Nazi Party that she refuses service to anyone who does not say "heil Hitler" upon entering her shop. They pass Rudy's father's tailor shop, then a street of broken, empty homes labeled with yellow Stars of David.
The small town of Molching and its cast of characters is the background of the novel, and the apparent quietness and stability of the town becomes steadily consumed by the political events surrounding the Nazis, the Holocaust, and World War II. Some instability is already evident: the broken shops and anti-Jew graffiti are signs of the Holocaust, and the Jews have already been terrorized and driven into concentration camps. Like the Jews, Liesel's father was persecuted and presumably killed or placed in a camp for being a Communist, and her mother gave Liesel up in part so Liesel could avoid the same fate.
While some characters like Frau Diller are staunch Nazis, others like Hans and Alex Steiner are worried about Hitler and the war, yet do not speak up against the steady destruction of their way of life. Death remarks that one gravedigger does what he is told by the other, and wonders what if the "other" is more than one person. This is a metaphor for Nazi Germany, where one man, Hitler, commands the entire nation, which obeys him unquestioningly.