Does USPS ship according to the ZIP code or the Country and city? (Because it seems like they shipped my package to the wrong continent :P)?

It is shipped by State, city and then zip+4. If you put the wrong zip, they will correct as the sorting computer will kick it for manual sort if the zip+4 cannot be determined by the information provided. If you ever notice, all first class letters are sprayed with a barcode on the bottom edge?

Parcels are handled by people, manually, not auto sorted, and travel 4th class. Your package may have accidentally been sorted for international, but it should be returned as soon as it is received and attempt to sort it to the delivery city and route, on the next route back to the US from that country, which may be a few days, depending on where the mistake is discovered. It may also run through customs, which can add other delays to the process.

Countries don't have ZIP codes; countries outside the USA don't use ZIP codes.