Final Fantasy VIII is set in a controversial world of war and advanced technology where your typical kindergartens/schools seem to have been replaced with military academies and being a mercenary at fifteen isn't a big deal. It is also a universe of magic, sorceresses and romance, though, and a very original one at that. This introduction is here to help you place Selphie in the game's storyline and answer any basic doubts you might have about it.
The Great Hyne was the creator of mankind in Final Fantasy VIII, and also the first sorceress. Subsequent witches became such by being given a fragment of Hyne's power, and are therefore respectfully referred to as her "descendants". For a sorceress to die in peace, she must first pass on her powers to somebody else; naturally, this gave origin to a seemingly never-ending "succession of witches" throughout history. The first woman in this line that holds a significant interest to us is Adel, the ruler of the very scientifically advanced country of Esthar as of around seventeen years prior to the start of the game.
Long story short, Adel was an evil, ruthless dictator; she mercilessly forced Esthar to engage into a fight with the rest of the world, invading many countries in the process: this dark period got the spiffy, accurate name of "Sorceress War". Eventually, however, the resistance factions, with the aid of Laguna Loire and his war buddies, managed to seal Adel and her powers in a special tomb, which was then sent to outer space for further protection. With Laguna as its new president, Esthar closed its borders and drowned itself into a mysterious, unexplained silence for what would turn out to be seventeen years.
Although the war was over, there were plenty of casualties to deal with, such as the huge number of children left without parents at the end of Adel's bloody reign. This, of course, is where Edea kicks in. Edea Kramer was a sweet, caring woman who had inherited powers from a dying sorceress at the age of five; however, contrary to Adel, she had never become evil (probably because she had a knight to protect her from herself): on the contrary, she was such a kind soul that she decided to take several war orphans in, offering them a safe home to spend their childhood. Selphie was among these kids, and she loved her Matron dearly.
One day, while outside the orphanage looking for Squall, a young child from the town of Winhill also under her care, Edea came across yet another sorceress on the verge of passing away: this time it was Ultimecia, a dangerous, mad witch from the future. Afraid that she might get a hold of one of the children instead, Edea immediately volunteered to receive her powers. Soon after, aware of the danger that the awakening of another evil sorceress would represent to the world, and particularly afraid that this person could turn out to be herself, Edea came up with the idea of creating a military force whose main duty would be to defeat the next evil witch, if any and if needed: and thus Garden and SeeD were born, respectively a military academy for young people and its special force of well-trained mercenaries.
Many years have passed, and Galbadia has become the most influential country in the world, in several (bad) ways resembling what Esthar had once been. Selphie is now seventeen and a student at Trabia, the last of the Gardens to have been built; the day the game events begin, she has just transferred to Balamb in order to take the final SeeD admission exam. In Final Fantasy VIII, the player is Squall Leonhart, an aloof SeeD cadet from Balamb Garden with an annoying tendency to reply "whatever" to pretty much everything anyone ever says to him. As time passes, he reluctantly joins forces with those that, along with him, will turn out to be the "children of fate" to fight the ultimate sorceress: but little does he know what a tangled web of romance, hate, confusion and unexpected turns of events he's about to get himself into...