By the terms of the Treaty of London signed by Britain, France and Italy, which treaty was used to induce Italy to join the Allies, the Dalmatian islands in the Adriatic Sea were promised to Italy and Fiume was to be given to Yugoslavia, thus giving it a port city on the Adriatic. At the Paris Peace Conference in January 1919, Italy began demanding Fiume as well as Dalmatia (virtually blackmailing the Allies by suggesting Italy might be forced to join Germany if their wish wasn't granted). Italy argued that the population of the city was two-thirds Italian and wished to have the city annexed by Italy.
During the summer of 1919 French and Italian occupation troops had clashed in Fiume and an inter-Allied commission condemned the Italians for provoking the trouble. The Italian troops were ordered out of the city and were replaced by British soldiers.
On September 10, 1919, D'Annunzio garnered the assistance of many of the troops who had left Fiume and led them back to reclaim the city. D'Annunzio and his 4000 troops marched into the city which welcomed them with open arms. There was much popular support in Italy for annexing Fiume which created a vexing problem for Prime Minister Nitti of Italy. D'Annunzio and his troops remained in control of the city while the Italians, the French, the U.S. and the British tried to figure out what to do.
In December 1920 Italy and Yugoslavia reached an agreement to make Fiume an independent sovereign city. Rejecting this, D'Annunzio declared war on Italy. However, after only one day of bombardment by the Italian cruiser Andrea Doria, D'Annunzio declared that the Italian people weren't worth fighting for. He surrendered and retired to his villa in Gardone on the Lake of Garda.