As far as I have read, the explicitly negative connotations that the word 'Fascism' evokes are purely a product of the atrocities of the Second World War. The avoidance of the word in academic, colloquial, and official language is rather noteworthy, as many regimes and political parties in the post-war era could be argued to have fascist political underpinnings. In all, the present-day understanding of Fascism as an exclusive and paramount evil is mainly a result of the shunning of the term after 1945.

This however does not mean that Fascism was not seen as a positive force at the time. Particularly Italian Fascism in its relationship with the arts was notably vitalistic, evocative, and adhortative in a still reasonable manner, in comparison to the revolutionary pretences of socialism, and the overall complacency of liberal-democratic thought. Italy with its internal fault lines was of course a case apart. The main causal relationship that Fascism had with the arts was its radical emulation of modernist thought. Where initially the late-19th century modernist avant-garde spawned the Futurist movement of the 1910s, early Fascists (as well as Communists) used the cultural agency of the Futurists in conjunction with their own political power to "destroy the old order, and supplant it with a new worthier one, free of decadence and backwardness" (see Golomstock's introduction for more).

I can unfortunately not give a good account of the German case, but would certainly invite any and all of you to step in for this!

Now, the final cardinal issue of this post - in my view - resides in the follow-up question: is Fascism inherently bad, or is it merely socially constructed as such for (often petty) political and historiographic reasons? I personally would say, yes, that is the case with Fascism. This puts us then in front of an even more challenging issue: could Fascism - after some rehabilitation/exoneration - return in any shape or form? This is the debate I myself - as well as history in general - seem to have a very unsettling relationship with.

David Gilmour. The Pursuit of Italy (London: Farrar, Strauss, and Giroux, 2011)

Lucy Hughes-Hallet. The Pike - Gabriele D'Annunzio: Poet, Seducer, and Preacher of War (London: Fourth Estate 2012)

Igor Golomstock and Robert Chandler (trans.). Totalitarian Art in the Soviet Union, The Third Reich, Fascist Italy, and the People's Republic of China (New York: Overlook Duckworth, 2011)

Edit: Forgot my sources, now fixed..

In a neutral sense, it has been, and from the right wing, it was used in a positive sense. The Nazis openly flaunted the fact that Hitler was Germany's "Mussolini", and that helped them electorally. What the Soviet Union was for many leftists, Italy was for many rightists-the regime of the future, if a little regrettably brutal. It's important to remember as well that Italy and Germany weren't the only right wing regimes in interbellum Europe-quite the opposite. Austrofascism and Portugal's corporatist regime were widely hailed in their days as achieving miracles for their people. So the negative connotations of Fascism were, until WWII, generally confined to the left wing of the political spectrum. This is more of a result of Nazi Germany's atrocities than anything else.

It's important to understand that Mussolini came to power a decade before Hitler did, and until around 1937/1938 or so, Fascism was associated with him, not Hitler. In the 20s and early 30s, Mussolini commanded respect from many famous Western intellectuals and politicians in a way that Hitler never did, including future enemies such as Churchill and FDR. Mussolini was immensely popular among Italian-Americans during the Depression era. Fascist Party membership until the war was not considered completely disrespectable in educated circles-for example, Enrico Fermi was a member of the Fascist Party, as most prominent middle class Italian intellectuals were regardless of their political taste, until the alliance with Hitler and subsequent anti-Semitic turn (Fermi's wife was Jewish) in caused him to flee Italy just before the war. He was never ostracized for it in the same manner that Pascal Jordan or even Werner Heisenberg was during (to an extent-his real ostracism came after the war. He stayed, unlike Fermi) the 30s. Einstein even was willing to write a letter to the Fascist regime asking them to release somebody in a way he would have never done with the Nazis. Even Lenin commented that it was shame that such a "first-rate man" had to turn away from the socialist cause.