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When the town's zoning laws won't allow Peter to build his own pool, he tries to get a permit and discovers his house is not apart of the US.  He decides to name his country Petoria and invades Joe's pool, causing the US Army to get involved.

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Family Guy Season 2 Episode 18 Quotes

Peter [reading his tax refund]: Oh my god, it's better than I thought. An Audi! I'm gettin' a car!
Brian: Uh, Peter, there's a "t" in there. That says "audit".
Peter: No, Brian, it's a foreign car... the "t" is silent. Sweet, I'm gettin' an Audi!
Chris [lifts up his shirt]: I have an innie

Peter: Ok, here's another riddle. A woman has two children. A homicidal murderer tells her she can only keep one. Which one does she let him kill?
Brian: That's... that's not a riddle. That's... that's just terrible.
Peter: Wrong, the ugly one.