The Capitol is the primary antagonistic faction of The Hunger Games trilogy, being the leader of the twelve districts of Panem and a fascist-minded totalitarian state that brutally represses the districts and keeps them under its heel.
After the collapse of modern civilization, the Capitol brought thirteen districts together and ruled them, thus forming the nation of Panem. However, all districts then revolted against the Capitol, causing the city to destroy District 13 completely and establish dictatorial regime in the rest of the districts. Since that, the life in the districts has been poor and miserable, as they have to give most of their food, coal or power to the Capitol. The only exceptions are wealthier District 1, 2 and 4 which have better relationship with the city.
As a revenge for the rebellion, the Capitol created the Hunger Games - an event where one boy and one girl from each district fight to death in the Capitol's arena until only one lives.
In opposite of poor districts, people in the Capitol live in extreme luxury and wealth. To fit in, they commonly wear colorful, weird clothes and wigs. Thanks to plastic surgery, the citizens', as well as their pets' bodies are dyed in bright colors. Whiskers, talons and tattoos are also very popular, causing the citizens looks like aliens to districts residents. Using resources from districts, the people of the Capitol have always enough of everything. They even drink special liquid that causes them to vomit, thus providing enough room for more food.
As their children don't have to participate in the Hunger Games, the Capitol residents consider the Games to be a normal sporting event that celebrates past time. Every year, they watch the Games to have fun and don't understand any resistance or disgust for the crime their government is committing by forcing children to kill each other. For example, Effie Trinket is extremely insensitive and callous to the suffering and poverty that Tributes go through, and is intensely optimistic and enthusiastic about the prospect of the Games, and continuously flaunts her own (Imaginary) involvement and possession of Peeta and Katniss when they win the Games. However, the citizens of the Capitol still love sentimentality and melodrama what is commonly used by tributes (like Katniss' and Peeta's love story). Some residents are sponsors for tributes and pay money for packages of supplies that are then delivered to them in the arena.
Most citizens of the Capitol also seem to be dummed down. Plutarch Heavensbee, a resident from the Capitol who aids the rebels, implies that most the people of the Capitol have traded their political/social asparations in exchange of panem et circenses.
Capitol residents who commit serious crimes (such as treason or desertion) are usually turned into avoxes, slaves who get their tongues cut out. Avoxes usually do the work in the Capitol no one else is keen to do, such as servants, waiters, cleaners and day-to-day maintenance. An Avox named Pollux for example worked in the utility pipes for five years, until his brother Castor managed to buy him out. Darius, a former Peacekeeper at District 12, was turned into an Avox when he intervened after Romulus Thread whipped Gale after twenty whips.
The Fall of the Capitol
Ultimately, as the situation in the twelve districts escalates, people from the various districts begin rebel, leading to a schism between the districts that remain loyal to the Capitol, and those who choose to stand up to them. In their desperation to suppress a rebellion, the Capitol at one point even destroys District 12 to punish Katniss Everdeen for her "defiance". However, rebels led by District 13 eventually take control over the Capitol and execute President Coriolanus Snow. The new president of Panem, Alma Coin who leads the rebellion, is soon killed by Katniss after realising that she has planned to make another Hunger Games involving the children of the Capitol, therefore making her as evil as Snow. Commander Paylor is the new president and she forever shut down the Hunger Games and the arenas and dismantled the evil within the Capitol. Paylor started creating a better Capitol where it is peaceful and people can make their choices for democracy.
Aside from the clear parallels that can be drawn to Ancient Rome (totalitarian and militaristic society with gladiator-esque games) the Capitol and its actions are also a blatant attack on modern day culture. In particular, it is shown for the growing desentization for the masses to real life violence, and how real life violence is almost becoming as a source of entertainment as fictional violence. In a cruel twist therefore, the reader is in essence taking on the role of someone in the Capitol, as the reader too is watching children fight and kill each other for "entertainment".