Could be a parallel world, but it could be twisted a few other ways.

1) The "fictional names" might be real names. The same way places like Galonia, Napkan, and others exist on Earth-Two but not in our world allows for the possibility of Zatara having stopped some minor country invading France prior to the actual German invasion.

2)The invasion may have been part of the overall invasion of France but Zatara only stopped one part and delivered the men in charge of that particular force to French authorities. The size of Zatara's actions may have been inflated when transclated from Earth-Two to Earth-Prime's writers.

I'd prefer to think that it does take place on Earth-2 by one of the explanations above. I can imagine Zatara might have received a visit from the State Department warning him not to try such a stunt again (after all, the U.S. was not at war with Germany at the time). And the magical nature of Zatara's actions might have set events in motion for Hitler to consult his necromancers in the Thule Society (and later their Japanese counterparts) to concoct his later use of the Spear of Destiny and Japan's use of the Holy Grail to erect a mystical barrier that would cause Zatara and any other magically-powered or magically-affected people to fall under the Axis spell.

I understand, and that's fine. I just was wondering what it would be like on a world where the heroes really were that successful at ending the war early on.