Despite being one of the victorious allied powers in World War 1, Italy entered a period of economic crisis and social turmoil, leading to the rise of the Italian fascist dictatorship in 1922; thus leading to their collaboration with Nazi Germany in WW2. (wiki) 

When Stevens is recalling his conversations about allowing the general "uneducated public" to have part in the democratic process, Darlington says "I’ll say. Look at Germany and Italy, Stevens. See what strong leadership can do if it’s allowed to act." Darlington's nature is to sympathize with these fascist countries that suffered their rightful loss in WW2. It's apparent that Darlington is being led into being coerced by the recovering German and Italian officials throughout the novel.

Italy is referenced a couple other times throughout the novel, but I feel as this exposes Darlington's true character the best, and is most relevant.