In 1943, the war didn’t go well for Italy and its Duce, Benito Mussolini. Following the disaster in Afrika, Allies have landed in Sicily and quickly gained a foothold. The situation was desperate and it was obvious that once Sicily was taken, the next target was Italian mainland and Rome itself. Italy lost the war, but Mussolini stubbornly refused to acknowledge that fact and continued to ramble about the Second Roman Empire. His compatriots were having none of that, and on July 25th, Fascist Grand Council voted 19–8 to remove him from power. Among others, his own son-in-law Galeazzo Ciano voted against him.

Mussolini tried to ignore the Council’s decision, but on the next day, King Victor Emmanuel III summoned him to the royal palace and dismissed him from service, with Marshal Pietro Badoglio appointed as the new Prime Minister. Duce was arrested as soon as he left the palace.
One of the first public decisions made by the new government was the dissolution of the Italian Fascist party. Secretly, they entered negotiations with the Allies in an effort to extricate Italy from the war. On September 8th, Badoglio announced that his government had signed an armistice with Allied powers. This anticipated defection triggered German Operation Achse and Wehrmacht troops quickly seized control of much of Italy and disbanded Italian army units. On September 12th, a special paratrooper unit freed Mussolini from Campo Imperatore Hotel where he was imprisoned. He was quickly taken to Germany for a meeting with Hitler, who was shocked by Mussolini’s ragged appearance and his lack of desire to be restored to power and exact retribution against those who have betrayed him. It was only when Hitler threatened to destroy Milano, Turin, and Genoa that Mussolini agreed to his demands.

The Italian Social Republic was proclaimed on September 23rd. The state comprised of Northern and Central Italy, the parts of the country still under German control. It was completely dependent on its German overlord for everything, from financial to military aid. Mussolini chose small town of Salò on Lake Garda as a temporary capital, at least until Rome could be made safe, hence the informal name of Salo Republic. Duce did take revenge on his betrayers, with Ciano being targeted first. He was arrested and shot, despite the protests from both Mussolini’s wife and daughter.
The new republic managed to survive for almost 18 months. It was only when Allies broke through the Gothic line, a heavily fortified German defense line in Northern Italy that Mussolini was forced to flee. He and his mistress Clara Petacci tried to reach Switzerland but were captured by partisans near Lake Como and shot on April 25th, 1945. Their bodies were taken to Milano and hung upside down on public display.
Source: historyinanhour.com