What country are Charlie and Joe living in?
It certainly isn't America. It looks like early 1970s Germany, stuck in the 1940s. I know in the 2005 adaptation, they're also living in some European country as well, but it's constantly snowing.
shareFrom what I know of the behind the scenes stuff the dvd said, it was filmed in Munich during the 1970s. The film-makers wanted the story to be timeless, and they chose not to film it in America or England, because the architecture is too easy for people around the world to identify. But Munich? Only Germans can actually identify it on sight.
Roald Dahl didn't actually say so, but I have a strong suspicion that he originally intended much of his book to take place in England (being British himself), despite never naming locations or where the other 5 kids came from in "Charlie and the Chocolate Factory." The only hints he gave were that Charlie lived in a large town or old city, and he happened to live in the same location as Wonka's factory, and that the other kids were from out of town. That's it.