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Italy from 1922 to 1943/4, under the rule of Benito Mussolini. Colloquially known as "il ventennio" ("the twenty years") in Italy.
Mussolini came to power after the March on Rome, where a bunch of threatening poorly-equipped Black Shirts successfully made the King of Italy make Mussolini Prime Minister, despite the fact that the army was completely loyal and would have beaten them every day of the week - easily. But the King and his advisers were afraid. Not of Mussolini, mind you. They were afraid that a socialist revolution was just around the corner, considering the fact that workers had been taking over factories up and down Italy for the previous two years. Mussolini promised to rule with an iron fist and put the rebellious workers in their place. That was good enough for the King, and Mussolini got the job.
Il Duce remained PM throughout his rule - the King was never removed from power - and engaged in some rather bizarre practices. He's one of the few leaders to have been photographed, willingly, with his shirt off (others include Vladimir Putin, with Barack Obama papped shirtless...and let's not talk about the Czech Prime Minister caught more-than-shirtless at Silvio Berlusconi's party...), trying to make himself out to be a highly virile Italian. He, like Adolf Hitler, encouraged Italian women to have lots of kids and tried to get them to dress modestly, while still liking to see scantily-clad women in movies.
It is Mussolini's legacy that North Korea calls in its policies of 'Juche', economic self-reliance, policies which have their origins in National pride rather than economic common sense. Italy's self-sufficiency in grain, for instance, came at the cost of other crops, vineyards and pasture; bread cost much the same, but the diet of the average Italian became very bland. Mussolini considered economics a zero-sum game and accordingly saw economy as a means to its own end, through warfare: industry equips the armed forces, the military conquers new territory, the new territory provides more raw materials for industry to expand.  It didn't help that one of his economic advisors was Charles Ponzi, the guy whom Ponzi schemes are named for...
The Fascist regime was not as bad as Nazi Germany: There were anti-Semitic laws, but no deportation of Jews until after the fall of Mussolini. The one exception was the invasion of Abyssinia (Ethiopia) in 1935 and 1936, where the Italians used mustard gas on military and civilians alike, with the sole purpose being a colonial land-grab. Albania was also occupied in 1939, though much like the 'occupation' of Bosnia by Austria-Hungary some three decades earlier this was simply the formal recognition of a practical reality - Italy ran Albania in all but name up until that time. Mussolini was never as powerful as Hitler, especially within his own country, and unlike Hitler he actually had to do a lot of politicking to get things done. He also had to deal with far more popular resistance from the Italian people than Hitler did in Germany, and unlike Germany, Italy sucked at war — it could be argued the reason it wasn't as sinister was that Mussolini never really held the kind of power Hitler did, and the people who made up his government were nowhere near as crazy. If one imagines Stalin as the closest analogue to Hitler, one could see Mussolini falling somewhere between Hitler and Churchill in the way he ran Italy. Powerful, yes, but not unchallenged.
Italy eventually joined the Axis after some vacillation. (The British even offered Mussolini large tracts of Egypt as a sweetener for him to come in on our side, or at the very least stay neutral. This was not a ridiculous proposition - Italy had been allied to Britain against Germany and Austria in WW 1, and many Italians felt a British alliance was infinitely preferable to the alternative.) However, the prospect of easy land-grabs at the expense of France and Britain caused Italian entry into World War II. This involved occupation of parts of southern France at the expense of a country already decisively beaten by Germany, and a sizable Italian Air Force contingent was sent north to participate in the Battle of Britain. Mussolini had cause to regret this: first beaten up in humiliation by the Greeks, and then an army ten times the size of the British opposition was comprehensively defeated in North Africa. Thus the world's perception of the Italian army at war was one of endless columns of prisoners going into British captivity. Further humiliation followed: the Italian Navy was caught in its home port of Taranto by British aircraft carriers, and sent to the bottom in an attack that was a precursor of Pearl Harbor (incidentally, Japanese observers took careful notes). This forced him to ask help by Nazi Germany and its Allies. This led the Germans to finally subdue them after the 1943 British and American invasions, first of Sicily and then of mainland Italy (see Catch-22 as an example of literature set at that time). Mussolini was couped, essentially became the Gauleiter of Lombardy and half the north-east directly annexed by Germany, was forced to flee and was captured by Communist partisans. The Communists then shot him and his mistress and hung their bodies in public. On meat-hooks. Upside down. At a gas station. While a large crowd cheered. This is what later persuaded Hitler to ask his henchmen to burn his body - he did not want to be put on display. Italy more or less functioned as a Spanner in the Works for the Nazi war effort, particularly given that the Germans were continually forced to rescue the Italians when the latter started fights they couldn't win, siphoning resources that Germany could have used on its own fronts. Erwin Rommel himself said that while the German Army impressed the world, all the Italians could do was impress the Germans.
The later performance of the Italian armed forces was never as bad as their disastrous debut, which led to the false perception that Italian flags came in white only, the red and the green bands being omitted for expediency. With low morale, and atrocious equipment, an ill-led Army fighting war it didn't want against an enemy it didn't want to have along an ally it didn't like to be associated with was bound to be mediocre. The Germans did praise the fighting skills and abilities of elite Italian units, however, rating them at least equal to any unit in the Afrika Korps. The Folgore parachute regiments were especially singled out for German praise. However, the Russians knew exactly what they were doing at Stalingrad, where they refused combat with German troops and elected to break the Axis line by hitting Italian units.
When Fascist Italians are portrayed in fiction, they are never shown to be as evil as Those Wacky Nazis. At best they're portrayed as benign (and almost silly) bumblers who are just caught up with the wrong crowd, and at worst as obstructive toadies sucking up to Bosses Adolf and Hirohito. This characterization even applies to works produced by Italians.
Fascist Italy in fiction
- Naturally played with in Axis Powers Hetalia. The "Italy" of the title is essentially Facist Italy and manages to be more of a "cheese eating surrender monkey" than France is usually depicted. There's also Romano representing the southern half of Italy.
- Porco Rosso is set in this time period with fascism being an important part of the plot.
- 1900, where they are Complete Monsters.
- Also in The Conformist, another Bertolucci film.
- Amarcord is a semi-autobiographical example by Federico Fellini. When Mussolini visits the protagonist's town, a woman boasts that 99% of its residents are members of the Fascist Party. Of course, most of the townspeople are regularly portrayed as idiots.
- Captain Corellis Mandolin.
- Captain America's arch-enemy, the Red Skull, was changed from German Nazi to an Italian fascist for the ill-regarded first movie.
- Il Postino
- Malena, starring the luscious Monica Bellucci as the object of a young boy's idolatry.
- Salo Or The 120 Days of Sodom, a notoriously offensive adaptation of the Marquis de Sade's The 120 Days Of Sodom.
- Tea With Mussolini
- Titus, Julie Taymor's version of Titus Andronicus is a bizarre yet believable combination of Fascist Italy and Imperial Rome. Think alternate-history Rome which has gradually morphed into Fascist Italy.
- The first part of Roberto Begnini's Life Is Beautiful is set in of Fascist Italy.
- What Did You Do in the War, Daddy? (1966) takes an interesting approach. The members of the Italian Army are happy to surrender the moment American scouts enter the village of Valerno. Their only condition is that they are allowed to celebrate a festival with the villagers. As a whole, the Italians are depicted as friendly, fun-loving though proud bunch who are more than happy to help the Americans when the Those Wacky Nazis crash the party and catch them fraternising with the enemy.
- Frank Sinatra vehicle Von Ryan's Express starts with Allied POWs in an Italian prison camp just as Italy officially surrenders. Then they try to make their way through German-occupied northern Italy to Switzerland and freedom. One Italian soldier (the former second-in-command of the prison) is portrayed sympathetically as their guide, the rest of the prison guards are portrayed as complete buffons, and most Italian civilians are avoided because they're potential Nazi collaborators. One woman does indeed try to sell them out.
- Umberto Eco (who grew up in Fascist Italy) uses it as a setting for the extensive flashbacks in Foucault's Pendulum and The Mysterious Flame Of Queen Loana.
- Lieutenant-Commander Charles Lamb's autobiography, At War In A Stringbag, is an account of the war between Britain and Italy as sen by one of the Royal Navy pilots who destroyed the Italian fleet at Taranto, despite their own bomber planes being obsolete biplane hangovers from WW 1.
- The fourth and fifth volumes of Spike Milligan's war autobiography are set in Italy. Mussolini-His Part In My Downfall deals with Milligan's war in Italy, and his being wounded in the opening overs of Monte Cassino. subsequent volumes deal with his posting away from the front lines and a career in Army entertainment, and his first great romance with an Italian ballerina, in which he learns how ordinary Italians lived under and after Mussolini.
- Captain Bertorelli represents the Italian army in Allo Allo.
- This fails for three reasons: 1) war is ridiculously expensive; 2) keeping a hostile, conquered population in line, let alone getting them to do any work for you, is expensive and hard; and 3) if you go around conquering territories, you'll eventually piss off someone more powerful than you.