[7] The Kingdom of Hungary was an Axis power during World War II, intent on regaining Hungarian-majority territory that had been lost in the Treaty of Trianon, which it mostly did in early 1941 after the First and Second Vienna Awards and after joining the German invasion of Yugoslavia.

The extremist Arrow Cross Party's leader Ferenc Szálasi established a new Nazi-backed government, effectively turning Hungary into a German-occupied puppet state.

In 1920, the country fell into a period of civil conflict, with Hungarian anti-communists and monarchists violently purging the communists, leftist intellectuals, and others whom they felt threatened by, especially Jews.

After the collapse of the short-lived Communist regime, according to historian István Deák: On 29 February 1920, a coalition of right-wing political forces united and returned Hungary to being a constitutional monarchy.

[15] The succession after Horthy's death or resignation was never officially established; presumably the Hungarian Parliament would have selected a new regent, or possibly attempted to restore the Habsburgs under Crown Prince Otto.

Whether this represents an attempt to gradually re-establish monarchy in Hungary is unclear; at any rate, István was killed in an airplane crash in August that year, and a new Deputy Regent was not appointed.

In 1920, the numerus clausus law formally placed limits on the number of minority students at university, and legalized corporal punishment for adults in criminal cases.

Five categories were set up: civil servants, war veterans and army officers, small landowners and artisans, industrialists, and the merchant classes.

In March 1944, responding to the advancing Soviet forces, Prime Minister Miklós Kállay, with Horthy's backing, established contacts with the Allies in order to open negotiations and switch sides; however, this became known to the Germans, who proceeded to invade Hungary and quickly overran the country, meeting only limited resistance.

With the country now under German occupation, Horthy was forced to remove Kállay from his position and appoint pro-Nazi politician Döme Sztójay as the new prime minister.

[20] Sztójay legalized the antisemitic and pro-Nazi Arrow Cross Party, deported large numbers of Hungarian Jews to Germany and initiated a violent crackdown on liberal and leftist opposition.

In August 1944, he deposed the pro-German prime minister and installed a more balanced government led by Géza Lakatos, in an effort to engage with the Allies and avoid occupation by the Soviet Union.

This did not sit well with Hitler and, in October, German forces overthrew Horthy and Lakatos and installed a puppet regime led by Ferenc Szálasi of the Arrow Cross Party.

A High National Council was appointed in January to assume the regency, and included members of the Hungarian Communist Party, like Ernő Gerő, and later Mátyás Rákosi and László Rajk.

Prime Minister István Bethlen's government dealt with the economic crisis by seeking large foreign loans, which allowed the country to achieve monetary stabilization in the early 1920s.

[24] Following the start of the Great Depression in 1929, the prosperity rapidly collapsed in the country, especially in part due to the economic effects of the failure of the Österreichische Creditanstalt bank in Vienna, Austria.

Initially, despite a move towards nationalism, the new state under Horthy, in an effort to prevent further conflicts, signed the Treaty of Trianon on 4 June 1920, thereby reducing Hungary's size substantially: the whole of Transylvania was taken by Romania; much of Upper Hungary became part of Czechoslovakia; Vojvodina was assigned to the Kingdom of Serbs, Croats, and Slovenes (known after 1929 as Yugoslavia); and the Free State of Fiume was created.

The Axis powers were not interested in opening a new conflict in Central Europe; both countries were facing strong diplomatic pressures to avoid any military operations.

In 1944, after the ousting of Horthy by Hitler and before the installation of the National-Socialist Arrow Cross Party, the Hungarian government readily aided Nazi Germany in the deportation of hundreds of thousands of Jews to concentration camps during the Holocaust, where most of them died.

By early 1944, with Soviet forces fast advancing from the east, Hungary was caught attempting to contact the British and the Americans to secretly escape the war and establish an armistice with the Allies.

Sztójay governed with the aid of a Nazi military governor, Edmund Veesenmayer: he legalized the antisemitic and pro-Nazi Arrow Cross Party, started to deport Hungarian Jews en masse to Germany and initiated a violent crackdown on liberal and leftist opposition.

[21] Increasingly appalled by Sztójay's methods and alarmed by the imminent collapse of the Eastern Front, Horthy was finally able to remove him in August 1944 and replaced him with the more balanced Géza Lakatos.

[31] The new Quisling regime, however, was to be short-lived, for in November 1944 the Red Army had already reached Budapest and a long siege started, while Szálasi fled the capital.

According to Richard Griffiths, the regime's increasing economic dependence on Germany, its passage of antisemitic legislation and its participation in exterminating local Jews all place it within the realm of international fascism.