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Liberal period

Sardinia's constitution was extended to all of Italy in 1861, and provided basic freedoms for the new state; but electoral laws excluded the non-propertied classes. The new kingdom was governed by a parliamentary constitutional monarchy dominated by liberals. As northern Italy quickly industrialised, southern and northern rural areas remained underdeveloped and overpopulated, forcing millions to migrate and fuelling a large and influential diaspora. The Italian Socialist Party increased in strength, challenging the traditional liberal and conservative establishment. In the last two decades of the 19th century, Italy developed into a colonial power by subjugating Eritrea, Somalia, Tripolitania and Cyrenaica in Africa. In 1913, male universal suffrage was adopted. The pre– World War I period was dominated by Giovanni Giolitti, prime minister five times between 1892 and 1921.

Italy entered into the First World War in 1915 with the aim of completing national unity, so it is also considered the Fourth Italian War of Independence, from a historiographical perspective, as the conclusion of the unification of Italy. Italy, nominally allied with German and the Austro-Hungarian empires in the Triple Alliance, in 1915 joined the Allies, entering World War I with a promise of substantial territorial gains that included west Inner Carniola, the former Austrian Littoral, and Dalmatia, as well as parts of the Ottoman Empire. The country's contribution to the Allied victory earned it a place as one of the " Big Four " powers. Reorganization of the army and conscription led to Italian victories. In October 1918, the Italians launched a massive offensive, culminating in victory at the Battle of Vittorio Veneto. This marked the end of war on the Italian Front, secured dissolution of the Austro-Hungarian Empire, and was instrumental in ending the war less than two weeks later.

During the war, more than 650,000 Italian soldiers and as many civilians died, and the kingdom was on the brink of bankruptcy. The Treaty of Saint-Germain-en-Laye (1919) and Treaty of Rapallo (1920) allowed for annexation of Trentino Alto-Adige, the Julian March, Istria, the Kvarner Gulf and the Dalmatian city of Zara. The subsequent Treaty of Rome (1924) led to annexation of Fiume by Italy. Italy did not receive other territories promised by the Treaty of London, so this outcome was denounced as a " mutilated victory ", by Benito Mussolini, which helped lead to the rise of Italian fascism. Historians regard "mutilated victory" as a "political myth", used by fascists to fuel Italian imperialism. Italy gained a permanent seat in the League of Nations 's executive council.