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Major political parties, beset by scandal and loss of voter confidence, underwent far-reaching changes. New political forces and new alignments of power emerged in March 1994 national elections. The election saw a major turnover in the new parliament, with 452 out of 630 deputies and 213 out of 315 senators elected for the first time. The 1994 elections also swept media magnate Silvio Berlusconi (leader of "House of Freedoms" (Casa delle Libertà) coalition) into office as Prime Minister. Berlusconi, however, was forced to step down in January 1995 when one member of his coalition withdrew support. The Berlusconi government was succeeded by a technical government headed by Prime Minister Lamberto Dini, which left office in early 1996.

As a country, Italy offers many different faces, both culturally and geographically. The far north has many German speaking areas, popular destinations for skiing in the winter and walking during spring and summer. The Italian Lakes attract large numbers of visitors yearly, Tuscany (Toscana) and Umbria have been popular destinations for centuries, as has the Amalfi coast.

Under the postwar settlement, Italy received most of the territories promised in the 1915 agreement, except for Dalmatia, which was mostly given to the newly formed Kingdom of Yugoslavia. - because some Italian workers, inspired by the Russian revolution began taking over their factories, mills, farms and workplaces. The liberal establishment, fearing a revolution, started to endorse the small Fascist Party, led by Benito Mussolini (a former socialist turned nationalist), whose violent reaction to the strikes (by means of the "Black shirts" party militia) was often compared to the relatively moderate reactions of the government. After several years of struggle, in October 1922 the fascists attempted a coup (the "Marcia su Roma", i.e. March on Rome); the fascist forces were largely inferior, but the king ordered the army not to intervene, formed an alliance with Mussolini, and convinced the liberal party to endorse a fascist-led government. Over the next few years, Mussolini (who became known as "Duce", leader) eliminated all political parties (including the liberals) and curtailed personal liberties with the pretext of preventing revolution.

Puglia (Apulia) and Calabria in the south serve up a very different atmosphere to the north, with centuries of occupation and settlement leaving behind traces of many, many cultures and civilisations. Ditto Sicily (Sicilia). These areas, along with less visited ones such as Marche, Emilia-Romagna and Liguria are likely to offer better bargains for the visitor to Italy.

While the Allied troops slowly pushed the German resistance to the north (Rome was liberated in June 1944, Milan in April 1945) the monarchic government finally declared war on Germany, and an anti-fascist popular resistance movement grew, harassing German forces before the Anglo-American forces drove them out in April 1945.

The republican tradition in Italy had been started by Giuseppe Mazzini in the 19th century, but it immediately found a general consensus among the new political forces. The movement Giustizia e Libertà, that continued the traditional Mazzinian ideology, was the second important force during the resistance. It posed the question of the form of the state as a fundamental precondition to developing any further agreements with the other parties. Giustizia e Libertà joined the Comitato di Liberazione Nazionale (CLN). The various competing political factions agreed that a popular referendum would be held to determine the future choice of Head of State.

Significant changes are occurring in the composition of this trade. More value-added products such as office machinery and aircraft are becoming the principal U.S. exports to Italy. The change reveals the growing sophistication of the Italian market, and bilateral trade should expand further. In 2000 the United States imported about $24.5 billion in Italian goods while exporting about $12.4 billion in U.S. goods to Italy. U.S. foreign direct investment in Italy at the end of 1999 exceeded $14.1 billion.

Italy has been a democratic republic since June 2, 1946, when the monarchy was abolished by popular referendum. The constitution was romulgated on January 1, 1948. The Italian State has a central state authority (the Government), 20 regions and about a hundred provinces. The prefect of each of the provinces is appointed by and responding to the central government, which he locally represents.

From 1861 until 1922, Italy was a constitutional monarchy with a parliament, mostly elected with restricted suffrage (in 1913, the first universal male suffrage election was held). The so called Statuto Albertino, which Carlo Alberto conceded in 1848 remained unchanged, even if the kings usually abstained from abusing their extremely large powers (for example, senators were not elected but chosen by the king). The new state faced immense problems, both because of the widespread poverty and illiteracy (especially in the south), and the deep cultural differences (for example, there existed no common language) between the various parts of Italy: there were even peasant insurrections asking for the return of former rulers.

Albanian fear of renewed Greek designs on their country prevented effective co-operation with the Greek forces, and Mussolini's forces soon established a stable front in central Albania. Fearful that the Balkans might become the achilles heel of her domination of Europe, on April 6, 1941, Germany intervened (together with Bulgaria and Hungary) to crush both Greece and Yugoslavia, and a month later the Axis added Kosovo to Italian-ruled Albania. Thus Albanian nationalists ironically witnessed the realization of their dreams of uniting most of the Albanian-populated lands during the Axis occupation of their country.

Italy is well-known for its art, culture, and several monuments, among them the leaning tower of Pisa and the Roman Colosseum, as well as for its food (pizza, pasta, etc.), wine, lifestyle, elegance, design, cinema, theatre, literature, poetry, visual arts, music (notably Opera), holidays, and generally speaking, for taste.

Italy's dramatic self-renewal transformed the political landscape between 1992 and 1997. Scandal investigations touched thousands of politicians, administrators, and businessmen; the shift from a proportional to an Additional Member System (with the requirement to obtain a minimum of 4% of the national vote to obtain representation) also altered the political landscape.

According to legend, Rome was founded in 753 BC by Romulus and Remus, and was then governed by seven Kings of Rome. In 509 BC the last of them, Tarquinius Superbus was overthrown, and the Roman Republic was formed. The Republic was ruled by two elected consuls at a time, while the Senate (formed by the most notable Patricians, that is, aristocrats) and a city assembly formed a sort of Parliament.

At the end of the 8th century the popes definitely aspired to independence, and found a way to achieve it by allying with the Carolingian dynasty of the Franks: the Carolingians needed someone who could give legitimacy to a coup against the powerless Merovingian kings, while the popes needed military protection against the Lombards. As a result, in 774 the Franks invaded and defeated the Lombards, and their leader Charlemagne was proclaimed legitimate king of the Franks by the pope. Later, in 800, Charlemagne was also crowned emperor of the Holy Roman empire by the pope; the new emperor (who was never recognized as such by the Byzantines) immediately conceded direct rule over central Italy to the pope, creating the Papal States.

Italy strengthened its ties with Germany on May 22, 1939 when both Nations signed the Pact of Steel This document solidified the alliance between the two regimes.