Goths invaded, weakened by wars with Justinian and his generals. Lombards invaded, defeated by Charlemagne after the failure of the triple alliance between Lombards, Bavarians, and Franks. Carolingian power slowly dissipated, cities in northern Italy began to assert independence and form communes. Southern Italy was invaded by Normas, Kingdom of Sicily eventually founded. Frederick Barbarossa invaded, Imperial power dissipated, communes began to expand authority over their hinterlands. Kingdom of Sicily broke in two. Strongmen known as the signori took over many of the city-states in the north due to internal factional strife between the aristocrats.

Edit: Forgot, Muslim raiders attacked central Italy causing the creation of fortified hill towns and caused the proliferation of small, independent cities there.