The reason why totalitarianism in Europe was on the rise in the advent of Word War II is frequently explained by pointing out the economic difficulties European countries were facing. Countries such as Germany and Italy found themselves in massive economic struggles after World War I. Inflation was on the rise and the economy of many European countries struggled enormously, particularly during the Great Depression. People became increasingly frustrated with their governments and political leaders, as they were perceived to be too weak. This paved the way for right wing parties, such as the Nationalsozialistische Deutsche Arbeiterpartei (NSDAP) in Germany, which promised the people stronger leadership and a strengthening of their national pride, which would also result in a stronger economy.

However, there is also another aspect that encouraged the development of totalitarianism in Europe. The Treaty of Versailles had forced Germany to accept total responsibility for the damage and loss suffered throughout World War I. In addition to that, Germany lost substantial parts of its former territory, such as Alsace-Lorraine. This resulted even more in the German people losing faith in their government, as they felt their national interests had not been represented properly in the peace negotiations. This made it much easier for the NSDAP to rise and pave the way towards totalitarianism. As people wanted a strong leader, the perfect solution seemed to be Adolf Hitler and his party, who promised to bring power and national pride back to Germany.

The situation in Italy was very similar: Italy had been promised Dalmatia for their participation in World War I. However, at the end of the war, this did not happen, as France, Britain, and the US refused to honor the Treaty of London. Again, this signaled to the Italian people that their government was weak and that they needed a much stronger and much more patriotic leader. This leader soon appeared in the form of Benito Mussolini.

Whole books have been written on this subject, such as Hannah Arendt's On Totalitarianism. After World War I, three totalitarian regimes emerged in Europe: communist Soviet Union, Nazi Germany, and fascist Italy. In all three cases, a prime reason for the rise of an extremely controlling dictatorship led by a ruthless strongman was economics. Towards the end of World War I, the Russian economy was in such a shambles that a revolution broke out, overthrowing the monarchy. In defeated Germany after the war, the economy was also in a shambles, and Italy also had severe economic problems. In all three countries people didn't have jobs, suffering was widespread, faith in existing institutions was low, and people were looking for a messianic leader and/or movement that would change society and save them.

Second, both fascism (of which Nazism was a version) and communism worked from the premise of completely reforming society to get rid of the corruptions of the old: this rose from the sense that decadence and a declining and corrupt social order had led to the catastrophe of World War I. Both ideological systems went beyond regime change to envision the reformulation of humankind itself into a new and better form, and both systems privileged the state above individuals. Because of the lofty ambitions of both fascism and communism, it became justifiable to try to regulate every aspect of a person's life, and to kill—en masse if necessary—people who could not rid themselves of the poison of the old order.

Finally, mass communication and the growing technology of surveillance made it possible both to easily spread propaganda and to root out dissidents, real and imagined.

In sum, the sense of instability and social and economic chaos after World War I led to forms of government with a very high emphasis on control of all aspects of society and the individual.

The biggest single contributory factor was undoubtedly the Great Depression. It seemed to many that the prevailing economic and political system—free-market capitalism and liberal democracy—had brought about economic catastrophe, creating misery and poverty right across the length and breadth of Europe. The established parties and their politicians seemed incapable of responding to the crisis which they themselves had helped to create. They appeared fresh out of ideas, unable to deal with the tsunami of chaos rapidly engulfing the continent.

In desperation, many people turned to the extremist parties of Left and Right for solutions to the problems that they faced. Parties like the Nazis in Germany and the Fascists in Italy presented themselves as offering a radical alternative to the outmoded thinking of the past. They put forward bold economic proposals which they claimed would virtually wipe out the scourge of mass unemployment and restore prosperity. To millions of people without work, without hope, whose savings had been wiped out by hyperinflation, a new way of doing politics seemed like the only way forward. So they embraced totalitarianism, entering into a devil's bargain whereby they traded civil liberties and human rights for political stability and economic security.

The main thing that contributed to this was economic uncertainty.  In places like Italy and Germany, the end of WWI brought a time of economic chaos.  In times of economic chaos and uncertainty, people will look to any potential leader who seems strong enough to lead them out of their problems.  

Totalitarian leaders are good at looking strong and acting as if they have all the answers.  Therefore, totalitarians tend to become more popular in bad times.  Because many European countries were undergoing bad times between the wars, many moved towards totalitarianism.