The name Section 8 is derived from an old United States military discharge regulation for reason of being mentally unfit for service, and also refers to the 8th Armored Infantry in the game because of their participation in near-suicidal missions.
Section 8 takes place in the future after the human race has discovered interstellar travel and has colonized across the galaxy. At the time of the game, a group called the Arm of Orion has begun to ‘disconnect’ the outermost frontier planets from the main governing body, taking them over while keeping their presence hidden from the government.
As space travel is slow, it often takes weeks to communicate with or travel to a frontier world, affording the Arm with enough time to seize worlds and build their base of power, ultimately preparing an ambush for the government forces that will eventually respond.
The government then discovers the Arm of Orion, and sends in the 8th Armored Infantry, including Alex Corde (the player), on a mission to investigate, and presumably fight, the Arm invasion.