NOTE: Taken from POD article
In 1478, Aragon never forms Spain with Castile, and Granada is fighting them to stay Muslim. Later in 1485, Italy is reunited, and in 1492, Italy helps Chrisitopher Columbus with the New World Discovery, instead of Spain, sneaking through the Caliphate of Granada unharmed, Italy replaces the Spanish Empire, claiming all of OTL Spain's claims, making a bigger and better Italian Empire.
Effects after 1500
Italy discovers the New World, instead of Spain. This puts Italy at a very powerful scale. Because Spain is divided into 3 countries, Portugal is strangely weakened, causing the Netherlands to colonize Brazil. Britain and France discover this new world later named "the Amerigas" after Amerigo Vespucci, and progress the same as they do our Time line. Italy never went into The French and Indian War, and keeps Il Regina Nueda (Florida). France, having no European colonial powers on its side, surrenders in 1760, Britain gains all of French North America. France was too weak to help in The American Revolution, however, Italy helped, and also The Netherlands helped, in order to keep tea trade with the newly founded US. Later, Italy never sells Giovanniland (Louisiania) to France, but gives it to The USA, but fixes its boundaries to before the Mexican American War, Il Regina Nueda was also sold the the US, and its name shortened to Nueda.
Italy later granted Mexizarra (Mexico) independence, and does not help in the Mexizarran-Amerigan Wars. Mexizarra loses Texas, California Grand, and Gadsenia to the US. Italy later lost Otzilo (Central America) to the US after helping the losing CSA in The Amerigan Civil War. Italy manages to hold on its South American and African colonies for a good while.
Spain finally combines in 1904 and beats Ottoman Granada, it gains only Western Sahara in colonial terms. Then, WWI Begins, Italy allies itself with Britain, the USA, France, and Russia in the Entente. The Entente wins, and Austria-Hungary collaspes and is punished much harsher, although independent, Yugoslavia is under Italian influence.
In 1930, Italy becomes a Catholic Theocracy, which lasts even in today. In 1936, Ludwig Beck overtakes Nazi Germany after Hitler dies in a car wreck. Dictator Beck is ultra friendly with the USSR, and models the Nazis after Stalin, since there is no Mussolini. Italy is on The Entente again, which consists of Britain, France, and the USA (Joins in 1942 after Fascist Spain bombs Pearl Harbor). The Entente beats the Axis. (Germany, USSR, Spain, and a feudal Japan) in 1945. Germany loses some areas to Poland, and the world's trust. Russia becomes a republic, but loses Armenia (Transcaucasia). Japan is reunited as a monarchy.
Moving Into Modern Times