During World War II the United States focused on battling Japan and attempting to retain territory lost in Asia. By the end of the war the Soviet Union pushed through all of Germany and into Northern Italy.
North Italy was quickly founded in 1947 as a communist state with South Italy an American proxy. Five years later the North invaded the South. North Italian, Polish, Czech, and a token German force crossed the border moving towards Rome. After being initially pushed back the allied forces (South Italy, USA, UK, Spain, and Turkey) got organized and pushed back. After nearly three years of fighting North Italy was defeated and occupied by the Allies.
The United States pushed for re-unification of Italy. The Soviets were not willing to escalate the situation over a small bankrupt country. Their nuclear program and delivery systems were still far behind the West and they needed time before any full-scale confrontation. Italy was reunited in 1955 and the flag of North Italy was retired.
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