You can't really think about the alignment pyramid chart as actual policy or government type. It's more of a which way are you leaning chart. A nation all the way to democracy might not be democratic at all (ref NatChi), but will be much more inclined towards the western powers. A nation all the way to fascist will be more inclined towards the axis powers, while a communist would favor the USSR. Even then this not a 100% guarantee, as which political bloc your government is in also plays a large role. Those on the right will still favor similar governments (PA, FA, NS), while centrists will favor each other (RS, CE, LC), and the leftists will favor each other (LWR, LE, ST). So, even though Italy was all the way at democracy, it just meant that they had a more pro-western attitude, but were still fascist.