Obviously the Allied powers weren't pleased with Hitler annexing a non-German population for the first time. However the war wasn't declared until the invasion of Poland and from what I've read Chamberlain's response to the invasion of Bohemia was, despite public outrage, rather timid.
I know I may be going a bit too close to a what if question here, but based on what we know: Could Hitler have stopped at this point and get away with it or was the momentum of events in Europe too powerful to, realistically, put a stop to it?
Even when Poland was invaded the Allies did little to respond other than the gesture of 'declaring war'... By that stage it was obvious to Great Britain and Russia (who had already by then signed the secret Molotov-Ribbentrop pact) that war in Europe was inevitable, what the consequences would be and how it would all develop however was unknown...
Hitler's annexations and subsequent invasions were a direct violation of Versailles and although previously had been tolerated such as the occupation of the Rhineland by the British appeasement process, 1939 was the watershed when the rest of Europe realised that this was simply no longer Germany re-arming but territorial aggression which would result in international conflict.
War was definitely inevitable by 1939. The British began their rearmaments in 1938.
After The First World War, the British were essentially ruined, the war drove up the national debt from £6.4 million in 1914, to £7.4 billion in 1918. In the wake of their financial crises, the British began a huge disarmament process (British defence expenditure in 1919 was nearly £800 million, by 1921 it was less than £200 million and by 1933 it was around £100 million) and developed the "10 Year Plan".
Assuming their would be now major war in Europe for ten years, the government could focus on social work and infrastructure (the British basically had ancient technology in factories at this time, which is why Germany could overtake their economy so quickly over the period of 1871-1914). The fault in this plan was that it was renewed every year.
The Ten Year Plan was officially retired in 1932, however there was another forecast on defence expenditure in 1935 to go through to the end of the decade. The 1935 predicted expenditure for the army was under £7.5 million, the actual expenditure was about £13 million. The navy saw an increase from expected to actual of about 5 million too, and the air force about £7 million.
In 1939 the budget was trebled for the army, doubled for the navy, and nearly quadrupled for the air force.
Whilst it's possible that the rearmaments were a precaution for a much smaller war (the UK and Italy were to guarantee the new frontier of Czechoslovakia/Germany), it did seem war was coming. However, it was only by 1939 that it was known it was going to be a major war.