The jrpg label came about recently with the emergence of western rpgs on consoles (Morrowind, KOTOR, Fable) to differentiate the freedom-oriented style commonly found in Bethesda/Black Isle Studios/Bioware/ games (the major western producers of rpgs) from the scripted linear story-telling style found in most Japanese RPGs (Final Fantasy et al).

Bethesda, Black Isle and Bioware were inspired by the freedom and role-playing aspects found in Dungeons & Dragons and other pen n paper rpgs. The vast majority of Japanese rpgs weren't (though I suspect Shin Megami Tensei was). They have been mostly influenced by Wizardy (a dungeon crawling computer rpg with not much in the way of freedom or roleplaying) and later on by Japanese anime and Japanese culture and pop culture. Basically Wizardry bred with Japan and that's pretty much it.

As for Valkyria Chronicles, you have to look back to Fire Emblem. Fire Emblem is a combination of the rpg mechanics brought over from Wizardry and war games (apparently war games were an influence on Fire Emblem). It's also worth noting that the staple SRPG battle system that Fire Emblem pioneered looks awfully a lot like Ultima III's battle system. Maybe Ultima III was an influence?

Honestly I'd say Fire Emblem, Shining Force and Valkyria Chronicles belong to a genre of their own. They may be Japanese and have RPG elements but I see no point in lumping them in with Dragon Quest, Final Fantasy and what not. If you called Diablo a wrpg just because it's a western developed game with rpg elements, you'd probably piss off a lot of Bethesda/Bioware/Black Isle fanboys. I consider Diablo a dungeon crawler or Action RPG. Just like I consider Fire Emblem, Shining Force and Valkyria Chronicles to be strategy RPGs (I'd call them turn-based strategy games but I suppose I might offend Civilization gamers if I did. lol)

Actually you know what there is so much diversity within the RPG spectrum (even within the japanese and western ones) that I really don't feel like coming up with labels. There is a lot of diversity. You have turn-based rpgs. Real-time rpgs. And then you have adventure orientation, dungeon crawling orientation, scripted storyline orientation, hack n slash orientation, role-playing orientation (I'd argue this would be SMT), strategic orientation, etc. And often times you get mixing. Genre labels don't do things justice. You need to explain what a game is like in at least one sentence. Sometimes you need more than one sentence.

I've never heard of a Japan made car being called an American car or a German car so why would a RPG made in Japan be considered as being anything else than JRPG? I even consider Demon's Soul a JRPG, that's where the shit was made lol.

Secret of Evermore an WRPG confirmed.  

Shhhhhhh, now don't let people catch you saying that, you'll be burnt at the stake :P 

Pretty much this. For a much simpler example, Kingdom Hearts is extremely different, gameplay wise, as a DQ/FF/Persona game

I think its a SRPG!

Yeah I'd say that it would be a joke to consider Secret of Evermore a wrpg. Ditto for other wrpgs that play a lot like jrpgs. Pier Solar for one is made by a bunch of western developers (the project lead is Brazilian and most of the rest of his team is European) but it is without a doubt inspired by the 16-bit rpgs that came out of Japan. What good would come from labelling a game like that a wrpg when these games are not targetted to the wrpg audience at all?

Here's what I'm thinking:

Western RPG developers and Japanese RPG developers are unusual in that they share very few ideas with each other. Most other genres have merged geographically these days, to the point that Japanese games will freely borrow elements from Western games and vice versa.

The terms wRPG and jRPG just exist to represent this, the two different traditions which have remarkably little to do with each other. Most of the time you can just say one tradition exists in the West and one in Japan, and where a game is made gives you a good basic idea of what kind of game it is, but there are exceptions.

Most of the time you can also classify games according to which tradition they draw from -- one of the weird things is how often games only draw from either wRPG or jRPG conventions, and have nothing to do with the other. Just like the geographical lines however, there are exceptions.

Both ways to classify are just shorthand ways of describing games that are strangely different from each other, for the most part. There's no exact definition of jRPG or wRPG -- they're just labels to get you thinking on the right track.   Even though those labels mean different things to different people, there is so much diversity in the history of RPG video games (and computer games) that not having the labels to get you started might be even worse.

All my Japanese friends just use the term RPG as a main genre definition when referring to FF, DQ, the Tales of series and any other game that falls into the RPG category. Then they add other acronyms to further define the genre such as ARPG, SRPG, MMORPG, TRPG. Acording to Wikipedia Valkyria Chronicles is a TRPG but because it an Anime based RPG it could also be referred to as a JTRPG as well. also if you tack Demon's Souls for example that is a ARPG made in Japan but it as little connection with what is traditionally believed to be a JRPG it is not a JRPG in the trdisional sense but it is not a WRPG ether because it is not made by western developers but it dose has western and Japanese influences.

The same thing happens with the use of the term Anime in Japan Anime is a General term for animation not a unique genre if you are referring to what in the west is called Anime then that is Japan Anime and Animation like Disney is American Anime.

there are belief for example that FFVIIAC is not an Anime but it is not live action so in Japan it is classified as a CG Anime movie.

The "J" in JRPG means Japanese. We call games like Kingdom Hearts or Tales of or Demons Souls JRPGs because they were made in Japan. Valkyria Chronicles is an SRPG from Japan. So I would call it a JSRPG for "Japanese Strategy Role-Playing Game".