The narrator asks the reader to imagine if Homer had written about General Gandin. Homer would've written that Gandin was vague, foolish, and couldn't make decisions. Gandin wanted to save his men and ended up dooming them because he believed the Nazis. The narrator explains that Gandin was so stuck because everyone above him issued conflicting orders and so he had no clout. In July, the U.S. had bombed Rome and a week later, the Italian king imprisoned Mussolini and appointed Badoglio in his place. Badoglio asked the Allies for terms, abolished the Fascist party, and released political prisoners.
Homer's assessment of Gandin betrays that the Gandin of the novel isn't actually a bad person; he's just acting as though he's involved in a war that's far more fair and ethical than World War Two actually is. This also traces back to the way that Mussolini paralyzes his officers by not letting them in on information; even if Gandin had been willing to do more, it's likely he wouldn't have had the knowledge to do the right thing.
Badoglio signed a secret armistice with the Allies in the beginning of September, but the Germans were ready: they sent troops to Cephalonia to prepare. Gandin doesn't order counter-preparations. La Scala stops meeting at Dr. Iannis's house and all the Germans and Italians who had become friendly stop seeing each other. Weber feels betrayed by the Italians and wants to teach them a lesson. Corelli doesn't come home much, as his battery runs drills day and night.
When the Germans send troops to Cephalonia, it implies that Greece will actually become an important part of the war. Weber's sense of betrayal shows that he believes in the Nazi and Axis ideals far more than he values his friendships, given that he believes their friendship is compromised by their unwillingness to support the Axis.
Then, on September 8, Carlo fiddles with the radio and hears that the Italians will stop fighting the British and the Americans. He'd been thinking about Francisco and Albania, and he feels impossibly hopeful as the church bells start to ring in Greece. He excitedly runs outside and tells Corelli everything is over since the Allies will help them now. Corelli insists that the Allies won't help; they need to disarm the Germans themselves. That night, the Italian warships in Greece leave and take nobody with them. Corelli receives a phone call telling him to not attack.
Carlo's happiness betrays his optimism and belief in humanity's goodness, even after what he experienced in Albania and what's brewing in Greece. This suggests that Carlo's time in Cephalonia has taught him to value the power of human connection and goodness, even if in this case, that belief in the Allies is indeed misguided.
Weber waits for orders and thinks about how he misses the certainty that the Nazis were going to win. He feels that with as few troops as are in Cephalonia, the Germans are sure to lose. The next day, General Barge moves troops and General Gandin attempts to contact Rome. Pelagia and Dr. Iannis prepare medical supplies and Corelli attempts unsuccessfully to contact Greek partisans to ask for help.
Notice that Weber is looking only at numbers, while General Barge and General Gandin are looking at the conflict in a more strategic way. Corelli's attempt to contact partisans betrays that the Italians will need more than just themselves if they want to win.
Corelli sits on a wall and thinks about Pelagia and home. He feels he has no home: his family was forced to move to Libya by Mussolini and they all died of dysentery. Cephalonia feels more like home now. He feels pained at the thought of Pelagia mourning his death. When he returns to camp, his men are in revolt: they've just received orders to surrender to the Nazis.
The way that Corelli talks about his birth family shows how Mussolini's policies fundamentally destroyed all of Corelli's meaningful relationships and in doing so, left him alone--and able to empathize with the people he's supposed to oppress.