I'm going to disagree with the accepted answer as to what a seven year old needs to know or what is part of the understanding of WW2.
My issue is that while Hitler's fanatical racism was a part of the "why" and "what" of WW2, the answer glosses over the fact that he was an extreme German nationalist who wanted to rule the world. WW2 was a war of aggression: the Germans under Adolf Hitler invaded other countries, such as Belgium, because they wanted to control everything that happened in Belgium. Part of controlling everything was attempting to exterminate the Jews, yes, but that was a means to the end of creating the great Aryan Empire. And other countries such as the US and Britain didn't get involved because they wanted to save the Jews, they got involved because they or their allies were attacked. If Hitler had been satisfied with just Germany and Austria, there's no evidence to suggest that any country would have intervened in a mass murder of jews inside those borders.
It's insulting to history to say that Hitler was very good at tricking people into regarding jews (and other groups) as less than human. Hitler didn't have any trouble convincing the German people to hate the jews because there was a huge undercurrent of antisemitism already present in Germany and indeed in all of Western Europe. There is a long history of racism and exploitation of non-whites by various European nations. For example, half a century before Hitler, King Leopold of Belgium was decimating the Congo. To say that Hitler was good at tricking people is to misrepresent the truth about how people felt. Many people agreed with him, in Germany and in other nations.
So my suggestion, for a seven year old, would be a simpler truth: WW2 happened because the Germans tried to take over the world, and other countries didn't want to be taken over so they fought back and won. The Germans wanted to take over the world for several reasons. They had been beaten in WW1 and forced to sign a treaty that made life very hard for Germans. A man named Adolf Hitler became very powerful by making speeches about how the Germans could be a powerful state again. He told the German people that they were special and superior to all other peoples, and that they had a natural right to rule the world. Many people believed him, either because they already felt that way or because it made them feel good to think they were better than everyone else. So they started taking over other countries with their army and eventually other countries got together and stopped them.