It's a bit of a running joke but Italy has many political parties and this causes its governments to be unstable.
For example currently it has six major political parties plus dozens of minor players.
I've always been told it was due to the proportional voting system, however in the past 20 years Italy went through different systems - majority voting - and the number of parties has only increased.
Why is that?
In Italy, the electoral system can be changed with the majority of the Lower and Upper houses. The current electoral system called by Giovanni Sartori "Porcellum" gives the majority (and a bonus of elected, "premio di maggioranza") to a coalition of parties, not to a single party, so small parties can survive. Some parties of those are present only in some territories.
Post-war Italy hadn't a pure majority electoral system, the current one is proportional and the previous (Mattarellum) was a mix (75% majority, 25% proportional).
During last 10 years, only two parties become strong enough (more than 20%) to lead coalitions: PDL (center-right) and PD (center-left).
So, why there are too many parties?
Electoral system can be changed by majority: if a party knows it'll lost next elections, it can change the law to limit the opponent.
No real majority electoral system was adopted in Italy after WWII.
Highly polarized electorate.
No serious election threshold for parties was adopted to correct fragmentation by proportional system.
In the Italian edition of Comparative Constitutional Engineering (Ingegneria costituzionale comparata) Sartori describes these problems very well, and many times he cites Germany (proportional system with per-party election threesold) as an example to follow.
While there are very obvious reasons why a single-member district, first-past-the-post system would prevent a third party from emerging in a locale with 2 dominant parties [1], it's not at all obvious that such a dynamic would force an existing multi-party system to collapse to dual-party one, especially if there are mitigating factors (discussed below)
The Wiki link you provided indicates that currently, Italy has a mix of single-member districts AND (smaller) proportional representation system. The latter obviously gives additional anchoring to multiple parties.
Also, while there are many distinct parties, many of them are purely regional.
Italy seems to have an extremely wide variety of political viewpoints. The parties range from recently-disbanded "neo-fascist" Italian Social Movement to Communists and Socialists of various stripes to liberals of all kinds. This may promote multi-party system
While there are many parties, usually they unite into 2 main coalitions (center-left and center-right).
[1] - The usual simple reason is that voting for a less popular but strongly preferred third party simply means that you just deprived one of the two mainstream candidates of your vote (and decreased the chances of winning for the party you prefer more among the two for no gain).
