Well, look up war. A war itself is an open, armed, and often prolonged carried on between two opposing parties. Assuming we all know what pranks are (whether we know any good ones or not), a prank war is a war between two parties where the combat you'd expect from a war is nothing more than practical jokes. The opposing parties are usually two groups of highschool students, and is usually started from hatred of the group of higher status (or popularity) to the one of lower status, for whatever the reasons.
Prank wars range from all degrees; simple prank wars, mild prank wars, and all-out wars. Simple prank wars ususally consist nothing more than pissing the other team off occasionally. A mild prank war is when plans start going into action, and getting others involved that really have no meaning in the war whatsoever; any pranks you can think of without any physical means is considered 'mild', like hacking someone's online journal or tagging their school locker. Mild prank wars do tend to get pretty bad and argumentitive, but its really just a battle in wit, really, but as soon as that physical means is acheived, we've moved on to an all-out war.
An all-our war usually starts with the typical water balloon throw, but it does tend to escalate from there. This is usually the point where pranks are no longer done for fun, but for pure vengeance and great dislike of the other team; points begin to seize count for both teams because no one's interested any more, feelings start to get hurt, parents get involved, and the cops are called. It usually doesn't get this far, but its been known to happen.
All a prank war really is is the 'cooler' teams way of saying to the 'lesser' team, "We don't like you, so we're going to do all this nasty shit to you and call it a prank war so you don't get all emo and we don't get in trouble." Then again, while some prank wars really ARE just done for fun, some aspect of hate is usually involved, and prank wars are usually started as an excuse to get revenge on someone of the opposing team. As prank wars go, the 'lesser' team ususally wants nothing to do with the war, until something extremely personal is done to them. In rare cases, the lesser team can exceed the greater team, and in that rare occasion things often tend to escalate into an all-out quite quickly.
Cool kid #1: I hate those emos. They're such posers.
Cool kid #2: And they're always messing with our shit.
Cool kid #3: They think they're so hxc, but its ridiculous.
Cool kid #1: Why don't we just start a prank war to get back at them for all the shit they've done to us?
Cool kid #2: Great idea. Time for payback.
Later, after the emos find out
Emo kid #1: The cool kids are after us again.
Emo kid #2: As if they ever leave us alone. I hate being unpopular.
Emo kid #3: Maybe we shouldn't have messed with them.
Emo kids #1 and #2: Yea.
Emo kid #2: Pass me the razor.