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Once you research Nationalism, you have to keep your Radicals under 25% of your population, or you'll trigger a coup, either replacing your government with a republic, or with annexation into the next most powerful Italian state.
The latter is what happened to you, and is why you lost all of your progress. You lost the game; you were annexed. The game was simply kind enough to let you keep playing despite your mistakes.
Liberalizing pisses people off, and conquering pisses people off, so you probably had Radicals in droves. Italy requires a lot more balancing of your interest groups and Radicals than other areas; you can't just put taxes on very high, burn the world, and push through reforms with no popular support like you can in other areas.
Papal state annexed, owning all core italian provinces but Two Sicilies.
Then for some reasons Two Sicilies annexes me (despite them being a backyard country lacking in all departments), and I basically get back in time.
On top of that, after owning ALL Italy, it does not form and I do not have the options to do it.
Basically a Game Over scenario.
I wonder if Paradox hired some ppl to test whether their **** is working or not.