The Ottomans start as one of the beyliks in the ruins of the Sultanate of Rum, which is Seljuk (Turkic) Anatolia wrested from the Byzantines. The Ottomans use the late Byzantine instability to expand Turkic control into Thrace, Macedonia, and the Balkans, as well as conquering the other remnant beyliks of Anatolia. Later, they expanded into other ruins of the Ilkhanate (modern-day Iraq, predominantly), and resoundingly defeated the Mamluk Sultanate, giving them control over Egypt, Palestine, and the Hejaz (including the holy cities).

For much of its existence, the Ottoman Empire combined both Turkish and Arabian as prestige languages within its empire. It was only in the latter part of its existence, the last century or so, that the modernization effort focused on a narrow, Turkish identity that alienated the Arab populations within its borders.

> Also, isn't it more accurate to say that the Ottomans chose the wrong (German) side in a war, and that this is the cause of their final dissolution?

Ehh, picking the wrong side in WWI was only the coup de grace. It was the fourth war in 4 years that the Ottomans had fought--the Italian war for Libya, the First Balkan War (Serbia, Bulgaria, and Greece team up to wrest Macedonia), the Second Balkan War (Serbia, Romania, the Ottomans, and Greece team up to force Bulgaria to give up the land it just won), followed by WWI. The Ottoman Empire was deeply unstable from the Greek independence through its final collapse, and the very start of WWI has its roots in the instability of the Ottoman Empire and the Christian states attempting to peel Christian statedoms out of the Muslim Ottoman Empire.