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I don't want to insult anyone, but I always figured that the first Cardassian War was a Korea like affair. The Federation sent a few ships and battle groups, but never actually commited real forces against the Cardassians.
Once the Cardassians had been pushed back behind their borders, the assault stopped.
This would explain why technically the Cardassian War was going on when the Enterprise-D was launched, and why nobody thought anything about it.
The Cardassians don't have resources, right. The Federation does, hence the war of attrition idea.
The demilitarized zone came about because the Federation doesn't punish it's enemies, it negotiates with them.
Alex
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Didn't the Federation also cede worlds to the Cardassians during TNG's 7th season. IMHO if you'd just won a war, you won't be ceding territory even for peace. Remember the Federation had to remove whole colonies which led to the Maquis and armed resistance against the Cardassians...hardly a victory...
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The Federation did give up several colony worlds it had won during the war along the DMZ to Cardassians.
But it still can be considered a victory. Look to the Middle East and all the territory Israel was forced to give up to the Palistinians. Most of which was bought by the blood of Israeli soldiers. Most Israelis are angered by the situation, but they hardly consider it a defeat.