Daniel 2 deals with the vision of the statue made out of various metals. This vision is one of the simplest because the interpretation is given in the chapter. As we will see, this vision describes accurately the various major world kingdoms from the time of Daniel on down to the end of the world.
Babylon
In verses 37 & 38 it clearly states that Nebuchadnezzar's kingdom (Babylon) is represented by the head of gold.
Medo-Persia
In verse 39 Daniel states that an inferior kingdom will follow next. There are only two possibilities here. Either the silver chest represents the next immediate Babylonian king or it represents the next dominant kingdom that would overthrow the Babylonian empire. The fact that the statue represents all of the time from Nebuchadnezzar until the end of time, we would conclude that it must represent the next dominant kingdom. Also, when we compare chapter 2 with 5 and 7, it will be very clear that the chest of silver represents the Medo-Persian empire.
Greece
Moving on down the statue, history tells us that the empire that conquered the Medo-Perian empire was Greece. So, Greece is represented by the brass thighs.
Rome
Later, Greece was overthrown by pagan Rome. Which is represented by the iron. Iron, of course is one of the hardest metals. Likewise, Rome was the strongest and longest lasting of the empires.
Europe
Now, maybe you might be thinking that Daniel isn't stating anything profound. After all, one empire follows the next. Anyone could guess that. But if you were Daniel and you said that four kingdoms followed in succession, you would probably play it safe and say that a fifth followed next. But he didn't. Instead he describes the feet of the statue with continued iron, but now broken up and mixed with clay. And guess what. That's exactly what happened. The pagan Roman empire broke up into numerous countries that we now call Europe.
God's Kingdom
But this is not the end of the story. Because in verse 44 Daniel explains that God would set up an everlasting kingdom at this time. The stone in verse 34 is cut out without hands. This indicates that it will be created not by human effort like all of the preceeding kingdoms but would be formed by God himself.
This series of succeeding empires, one overthrowing the preceeding one, forms the basis for interpretering the rest of Daniel.