To elaborate a bit more: Diplomacy differs greatly from similar games (i.e. Axis and Allies, Risk) in that each army/fleet has the same 'strength'. There is no die-rolling involved to determine who wins in an encounter, it's just the number of units on offense/defense. It's impossible for a single army unit to capture a region so long as that region is occupied by an enemy unit, so taking territory requires either a concerted effort from multiple units that you own (which makes you weaker on other fronts), or it requires allying with other players in the game (which opens you up to being betrayed).
I wouldn't quite call it "the game that ruins friendships", but since it places a lot of emphasis on the social aspects of the game, rather than the strategic, it involves lots of lying and backstabbing, which can (understandably) strain relationships between the players.