General Gandin goes against what his men want and agrees with Colonel Barge: the Italian soldiers should evacuate the island. He doesn't think it's important that there are no ships with which to do so. In Corfu, German soldiers offered their own ships to the Italians to evacuate but shot all the Italians as they waded towards them. Italians who managed to reach German ships were bombed by the British. In Cephalonia, the Germans have two weeks to organize while the Italians either prepare for the final battle or give up, knowing they'll lose. The Greeks feel as though the worst is yet to come.
General Gandin's unwillingness to look at the facts and recognize that what he's agreeing to is practically impossible again shows how his time in the dysfunctional Italian army has hampered his ability to do anything right: he's no longer accustomed to looking at the facts and making a decision. The fact that the British bombed the escaping Italians shows that the horror of the war is inescapable.
When the German planes finally arrive in Cephalonia, it becomes clear to all that the Germans never meant to evacuate the Italians. Weber knows he'll have to kill his friends, and Gandin knows that his indecision has condemned his men to die. The planes drop bombs on the Italian battery. Corelli and Appollonio understand that the Germans will try to destroy Argostoli because that's where most of the Italians are, but Gandin filled the city with troops and remains in a conspicuous place anyway. He doesn't provide radios or telephones, meaning that none of the Italian forces can communicate with each other.
When Gandin sets his troops up to fail and die, it suggests that in addition to not being able to make practical choices, he's also come to resemble Mussolini in that he doesn't think of his soldiers as full humans who are capable of helping him make decisions either. The fact that they listened to him for the most part suggests that the Italian forces still hope that they'll have someone to rally around.
That night, Alekos watches the battle from the mountain. Bunnios sits next to him talking into his radio, trying to get his superiors to help the Italians. They refuse. Dr. Iannis and Pelagia sit in their kitchen, wondering if Corelli is dead. Stamatis and Kokolios knock on the door. They ask for Dr. Iannis's blessing to go shoot Germans with Velisarios and ask that he take care of their wives if they die.
When Stamatis, Kokolios, and Velisarios decide to go help the Italians, it indicates that all three of them now recognize that the Italian invaders were true friends and are worthy of their help and support.
Corelli walks through the ruins of Argostoli. He notices a child's hand sticking out of a pile of rubble and he finds the crushed head of a girl Lemoni's age. He apologizes to the girl and thinks that the war is killing children everywhere. He understands that he has to win the war. Because Cephalonia is of minimal strategic importance to anyone, however, nobody comes to help and nobody follows the few orders Gandin does give. German troops continue to arrive as displaced villagers run to Argostoli for shelter.
While Corelli doesn't specify what winning the war means, it's implied that he now believes the Germans should be taken down and the Allies should win so that the carnage can stop. This completes Corelli's transformation into someone who's willing to do the right thing for his friends and for humanity at great risk to himself.
The next morning, a German soldier feeds Italians who surrender and then shoots them all. The Germans continue to force Italians to surrender and then shoot them. On September 22nd, after three days of fighting, Corelli knows that the Italians will have to surrender. He rides his motorcycle to Pelagia and tells her that it's over. She offers to hide him, but he cries and insists he needs to stay with his boys.
The Germans show themselves to be heartless when they begin murdering Italians. Feeding the Italians first shows that the Germans understand how to manipulate their victims into believing the Germans care about them, suggesting the Germans know how to weaponize kindness.