A conflict is going on. It might be a shooting war or just a fierce rivalry; it might be only important to some of the characters or important to nearly everyone in the setting. However, it turns out that while the subordinates on opposite sides feel very strongly about it, the leadership on either sides aren't enemies. They might even be the same person! Normally, you'd expect someone in that position to attempt to defuse the conflict. But they don't, they encourage it, not because of Honor Before Reason, but because it is to their political advantage to keep the conflict going for the moment.
Spoiler Alert: Due to the nature of this trope, the mere listing of a work as an example could be a spoiler. While contributors are encouraged to hide spoilers where appropriate, reader beware.
A subtrope of Playing Both Sides. May involve the Mole in Charge. Compare Xanatos Gambit if the one doing the running benefits regardless of who wins or if anyone wins at all.
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In Darker Than Black, nearly everyone works for The Syndicate, although most of them don't know it. Part of the point of this is to trick Contractors into wiping themselves out, as most of them work for various intelligence agencies in (seeming) opposition.
In Sillage, the heroine lands on a planet locked in eternal war against machines. The inhabitants would have died years ago had it not been for the regular deliveries of food and supplies in large containers, though nobody knows who sends them. As Nävis investigates, she eventually discovers the AI running the robots is also the one responsible for the supply drops, as ages ago it was a military AI (they're sentient in this universe), so bored by peace it basically started running a real-life RTS, giving its opponents food so as to keep the game going.
Films — Animation
In Cars 2, Sir Miles Axelrod is hosting the World Grand Prix to promote his Allinol and is the shadowy leader of the Lemons. This is all part of a larger effort to discredit alternative fuels and encourage greater reliance on conventional petroleum sources.
Films — Live-Action
In the 1987 Dragnet movie, Reverend Whirley is the head of P.A.G.A.N..
In The Matrix Reloaded, it is revealed that the Machine intelligence known as The Architect designed the Matrix to periodically spit out a messiah figure to start a small revolt, and Neo is the sixth. The reason? Human free will adds just enough chaos to the system to prevent complete virtual management — but allow one human to restart the war, and the system remains stable. As the Architect puts it, "Your life is the sum of a remainder of an unbalanced equation inherent to the programming of the Matrix." In essence, the war is just another part of the operation of the power plant known as the Matrix.
In the Star Wars prequel trilogy, Palpatine ends up in charge of both the Republic as Supreme Chancellor and the Separatists as Darth Sidious. As chancellor, the conflict is his means of securing total and eternal power and destroying the Jedi knights.
In Wag The Dog, political advisors attempt to create an "artificial war" — and trick the public into thinking it's the real thing.
In Police Academy 6, the crime boss turns out to be the mayor. As mayor, he knew about the city's light rail plans which would increase property values in the covered areas, while as a crime boss, he could use a crime wave to drop property values so he could buy the land cheap.
The possibility of this trope is what prevents the ring from going to Gondor (or anywhere else but Mt. Doom) in The Lord of the Rings - since Sauron alone can control the ring, any faction opposing him and attempting to use the ring would inevitably be corrupted to the point where Sauron himself (as the ring is to some degree a physical extension of his will and personality) would be controlling both the forces of Mordor and the forces opposing Mordor.
Random Factor series: a giant space war has been going on for years. Then stuff starts going wrong, and the main character manages to gain access to the sentient AI running his side's war effort... but finds that actually, the two sides are orchestrating the war pretty precisely. Oh, and the people actually fighting and dying are half-size test-tube clones, on half-size space ships. Saves money, that way.
It's done in American Gods. While Mr. Wednesday rallies the Old Gods, his partner Loki is leading the New Gods as Mr. World.
Illuminatus!: Hagbard Celine is the leader of both the Legion of Dynamic Discord and the Illuminati.
In 1984, the resistance turns out to be run by the central government. Furthermore, the three world governments seem to be encouraging a state of constant warfare among them in order to better control their own populations - it's quite possible and often theorized that they are all really ruled by the same group, although this is never directly spelled out.
In Mercedes Lackey's Dragon Jousters series, it is discovered that both leaders of the warring nations (expys of Upper and Lower Ancient Egypt) are being manipulated by a corrupt Magician's Guild. The death-energies from the soldiers in battle are harnessed as sacrifices to fuel an immortality/youth spell.
Tanya Huff's Confederation of Valor series has this as a reveal in the last book: A heretofore unknown shapeshifting alien race started an intergalactic war just to study how the different species would behave, like mice in a labyrinth.
In Discworld, Lord Vetinari is not only aware that there are numerous secret societies and conspiracies trying to overthrow him or replace him, but according to Guards! Guards!, he's even founded a few of them.
In the Doctor Who New Adventures novel Toy Soldiers, there's a war where it turns out that both sides are being run by the same supercomputer, which had set the whole thing up because it had heard somewhere that periods of conflict often produce flowerings of creativity.
In the Fablehaven series, it turns out that the Sphinx is both the captain of the Knights of Dawn, dedicated to keeping the demon prison sealed, and the mastermind behind The Society of The Evening Star, who are trying to gain control of the means to open the prison.
Ender’s Game has Peter and Valentine Wiggin. They are genius children using primitive, pre-Internet Sock Puppets, Locke and Demosthenes respectively, to manipulate the major political thinkers through phoney debates; Demosthenes a warmongering demogogue, Locke a diplomacy-minded intellectual, and contrary to Peter or Valentine's actual beliefs. It's all an elaborate plan on Peter's part to formally establish himself as a great political mind, with influence and hopefully power, without the handicap of his age.
Hardboiled Wonderland And The End Of The World has two opposing factions, the Calcutecs that are paid to guard information, and the Semiotecs that steal and sell it. It's heavily implied that both organizations might be in cahoots, though, as with many things in the book, it's never revealed.
Several Warhammer chaos gods are prone to this, especially Tzeentch (the god of magic, messing with fate and Gambit Roulette) and Zuvassin (a minor chaos god of spite and failure).
In Warhammer 40K, there's not only Tzeentch, but the Eldar, the C'tan Deceiver, and the Inquisition running around trying to keep multiple sides fighting each other. Although in the Eldar's case, it's to redirect an enemy towards another to prevent them from targeting the Eldar.
Near Tyrannid space, a lot of rebellions turn out to be caused by a Genestealer cult manipulating the upper echelons of two or more factions, turning them against each other until the entire planet is consumed by war, making it easy prey for the hive fleet.
Ace Combat 5: The Belkans are aggravating/running both sides of the war.
In one of the Paranoia supplements, it's revealed that Friend Computer actually founded all the secret societies, just to see what would happen.
In the latest editions of the corebook, the Computer and the Ultraviolets rank the societies according to how dangerous they are. Those that are less dangerous are usually deeply infiltrated and influenced by, if not outright run by, the Computer and/or Ultraviolets (FCCCP being the prime example). Other more extreme ones, like PURGE, are too dangerous for the Computer to control... but almost all have high ranking Ultraviolets at the helm (or close enough to make a grab for the wheel) already.
Shadowrun supplement Dragons of the Sixth World. Ryumyo is in control of both the legitimate government of Hawaii (King Kamehameha IV) and the ALOHA terrorist group opposing it.
This is somewhat the point of the game Imperial. Players buy stock in different 1900-era European nations and win by accumulating the most money on their investments, not by conquering one another. Sometimes the best move is to take majority control of two counties (meaning you get to take that nation's turn) and have them fight each other.
In the Card GameRace For The Galaxy, with the "Rebels vs. Imperium" extension it is possible for the same player to control both the Rebel alliance and vital parts of the Imperium government. And they should, because their sources of victory points overlap: Holding lots of Rebel military worlds.
The Announcer in Team Fortress 2. To quote from her character entry: "In a World where a lot of guys dressed up in red fight a lot of guys dressed up in blue, it's telling that she dresses in purple."
The recurring CEO/weapon merchant/villain in Rogue Galaxy attempts to do this with the two biggest nations around so that he can continue to profit.
Crackdown: The Reveal at the end of the game is that the leader of The Agency, a superpowered law-enforcement agency for which you're an agent, was the reason the city turned into such a den of crime in the first place — he'd been supplying the gangs with weapons, transportation and intel for years, turning them from random punks into serious threats. Thus, he got an excuse to declare martial law and unleash the Agents on the city... exactly what the point was, though, is never explained.
In Assassin's Creed I,Robert de Sable is secretly leading both the Crusaders and the Saracens, right under both King Richard's and Saladin's noses.
In the backstory the Templars were behind both the Allies and the Axis during World War 2. Churchill and Hitler were both part of the Order.
In Headhunter, the head of the criminal organisation also turns out to be the one in charge of the Anti-Crime Network.
It's hard to tell how many sides there are in XenoSaga due to a Gambit Pileup of impressive complexity, but Wilhelm is in charge of all but one of them - the party.
Well, the party and Dmitri Yuriev. Wilhelm has accounted for his actions and doesn't see him as a real threat, but Yuriev isn't actually under his control. Ormus/U-TIC, Vector, Hyams Heavy Industries, and large parts of the Federation, on the other hand...
In Tales of Symphonia, both the Desians and the Church of Martel are run by Mithos Yggdrasil and Cruxis, who want to keep the two worlds Sylvarant and Tethe'alla in a permanent struggle for mana in a misguided effort to prevent another of the Magitek wars that ended up killing Mithos' dead little sister, the Church's namesake.
Admiral Tolwyn in Wing Commander IV, indirectly. He claims to favor peace while the Black Lance forces under his command carry out a False Flag Operation to incriminate the Border worlds.
In Deus Ex: Invisible War, it turns out that the WTO and the Order are both being run by members of the Illuminati. The entire conflict between them is orchestrated by the respective leaders, who are working together.
This is foreshadowed by the more light hearted reveal that the archrival Pequod's and Queequeg's coffee chains are owned by the same company.
Xenogears is a subversion. Both sides in the initial Kislev/Aveh war are being orchestrated, through various puppets, by Krelian, but it later turns out that this war is a pure sideshow to the actual events of the storyline, where there are multiple top-level factions with their own puppets, along with a couple of genuinely independent groups.
In Red vs. Blue, both sides report to Vic at Red/Blue Command.
In Worm, Coil eventually accomplishes this; having successfully eliminated every villain in the city not clandestinely in his employ, he then stages a disaster which causes the local civilian government to be decapitated and the head of the Parahuman Response Taskforce to be discredited. He then replaces the head of the PRT in his civilian identity, putting him in charge of the city's superheroes.
In Drowtales, it turns out that the mysterious Nidraa'chal leader who lead them against the ruling Sharen family is actually Snadhya'rune Vel'Sharen, the eldest daughter of the empress, and two of her sisters were in on the plot as well in order to get rid of their mother.
In the animated, set-in-the-future adaptation of The Partridge Family, the family gets taken to play a gig on a planet called Texxas (the two X's are deliberate on the part of its supremely stereotyped founder; feels the real Texas is too small for his tastes). When they find the owner will not let them leave, they find some cattle rustlers and try to see if they can get them off the planet. Surprise! In order to make his Texxas even more Texas than Texas, the owner runs all the outlaw gangs as well. In short, the family has to find another way off.
Look at old photos of Abraham Lincoln and Jefferson Davis, the two leaders in the American Civil War. It's obviously the same guy. He wears a big fake beard as "Lincoln" and a swoopy wig as "Davis", but the cheekbones and eyes are identical. Then there is the squirrel!◊.
Due to the way corporate ownership works, one or more shareholders can easily wind up on the boards of two rival corporations. There are laws meant to prevent abuse of these situations, but they've got enough exploitable curlicues that strange stuff happens nonetheless.
During the medieval, renaissance, and early-modern periods, Europe was basically run by a few closely interrelated families. The monarch of one warring nation could easily be prominent in the line of succession for the other's throne.
More than one conflict was actually resolved by a "personal union," where the same person simply became the ruler of both states. Most famously in the English-speaking world, Queen Elizabeth I ended the off-and-on war between England and Scotland by giving the English throne to King James of Scotland.
Another famous example: During the Reformation, Charles, soon to be named Holy Roman Emperor, inherited three separate kingdoms (plus additional dukedoms and provinces) from three separate dynasties in rapid succession to possess for a time the world's largest empire. He was Charles I, Charles II, Charles III, Charles IV, or Charles V, depending on which part of his empire he was visiting at the time.
Yet another example from the Reformation Era. The French Wars of Religion were ended when the Protestant leader, Henry of Navarre, formally converted to Catholicism and became King Henry IV, with the condition that the Protestants were granted various rights and privileges in return (e.g. the right to maintain fortified towns).
And sometimes nobody was manipulating both sides, you just had members of the same family fighting against each other since they ruled on both sides of the conflict. After all, if your cousin has his own kingdom, there's no quicker way to move yourself up the line of succession for that throne than killing him. And the reverse is true for him with regard to your kingdom.