I've actually answered this before in a few different places. And relating to football as well! You can find a listing of some of the answers on my profile here. And in the podcast that /u/AlviseFalier linked to!
Basically: it was not a land of shiny, happy people. Those is power benefited greatly, while those who weren't...didn't. The Fascists and Mussolini attempted a great many things - after all the best way to stay in power is to keep the greatest amount of people happy. They failed.
Italy still bears the scars (some good, some horrible) of the efforts of the Fascists - particularly Italy's football league. The reforms the Fascists mandated after 1926 to steal the game turned the Italian league into what it is today. Italy's legacy as a football powerhouse is because of the Fascists. This isn't because they were massive football fans though. It's because sport is a very effective way to control the masses.
Why did the Fascists need to concentrate on building such a robust sporting empire though? Because Fascism was literally draining the country of food, money, steel, education, and industry. The Fascists were obsessed with grandiose plans - literally changing the layout of the City of Rome to fit their conception of what the seat of the new Italian Empire would be. The football stadia were to be modeled after the best of Ancient Rome and Greece. The cars were to be the envy of the world. And all of the material would come from Italy.
That's the hard part about autarky, which the Fascists preached. Italy is - by comparison - a small country. To think that Italy could completely cut itself off from importing industrial materials and grain is almost a ludicrous thought, and we know this because that's what the Fascists tried to do. They tried to have Italy go it alone, to prove their worth.
I'll let my favorite Mussolini quote sum up how well that went:
“Fortunately the Italian people were not yet accustomed to eat much…it feels deficiency and suffering less.” — Benito Mussolini, December 1930
If you look at the consumption index of Italy's time in power, it drops every single year. The Fascist policies were horrible on the average. Why invest in making sure that you have enough grain imports (which you have to because you have overworked the land in incredulous plans such as the "War on Grain"), when you can import steel instead so that FIAT can continue to build cars?
Italy entered into the 'great depression' almost two years before the rest of the world did. It's hard to pinpoint an exact date because it was a slow slide into depression, it wasn't overnight. This depression, however, killed the vital dollars brought by tourism and luxury item trade. The Fascist Party, ever concerned with the image they projected, diverted money from subsidizing farmers (which had worked the land to ruin) to subsidizing the military and automobile industry.
Despite the fact that Italian grain cost 50% more than American imports, the Party (and thus the state) continued to depend on the importation of 95% of the country’s oil, coal, and metal.
The thing is though, and it can't be forgotten, that it was possible to live in Fascist Italy and not feel the hardest effects of the regime. Even with how much the country was suffering Mussolini's approval ratings tended to be high - because the Fascist were quite good at rallying the people into believing in the cause.
The Fascists, as repressive and brutal and incompetent as they were, were always doing something to keep the people invested in the cause of Fascist Italy.