Taken by surprise, a small coastal town is overrun by an invading army with little resistance. The town is important because it is a port that serves a large coal mine. Colonel Lanser, the head of the invading battalion, along with his staff establishes their headquarters in the house of Orden, the democratically elected and popular mayor.
As the reality of occupation sinks in and the weather turns bleak, with the snows beginning earlier than usual, the "simple, peaceful people" of the town are angry and confused. Colonel Lanser, a veteran of many wars, tries to operate under a veil of civility and law, but in his heart he knows that "there are no peaceful people" amongst those whose freedom has been taken away by force. The calm is soon torn apart when Alexander Morden, an erstwhile alderman and "a free man", is ordered to work in the mine. He strikes out at Captain Loft with a pickaxe, but Captain Bentick steps into its path and dies of it. After a showtrial, Morden is executed by a firing squad. This incident catalyzes the people of the town and they settle into "a slow, silent, waiting revenge." Sections of the railroad linking the port with the mine get damaged regularly, the machinery breaks down often, and the dynamo of the electricity generators gets short circuited. Whenever a soldier relaxes his guard, drinks or goes out with a woman, he is killed. Mayor Orden stands by his people, and tries to explain to Col. Lanser that his goal – "to break man's spirit permanently" – is impossible.
The cold weather and the constant fear weighs heavy on the occupying force, many of whom wish the war to end so that they can return home. They realize the futility of the war and that "the flies have conquered the flypaper." Some members of the resistance escape to England and ask the English for explosives so that the townspeople can intensify their efforts. English planes parachute-drop small packages containing dynamite sticks and chocolates all around the town. In a state of panic, Colonel Lanser's army takes the mayor and his friend Dr. Winter, the town doctor and historian, hostage and lets it be known that any guerilla action will lead to their execution. Mayor Orden refuses to ask his people to stop active resistance, and feels that nothing can stop his people and that his death is imminent. He tells his wife that while he can be killed, the idea of mayor (and freedom and democracy) is beyond the reach of any army. Before his execution, Mayor Orden reminds Dr. Winter of the dialogues of Socrates in the Apology and Phaedo, a part he played in a high school play, and tells him to make sure that the debt is repaid to the army, i.e., that resistance continues.
