I already know about the eight stages of genocide and the basic process of dehumanisation. What i want to know is an exact historical example of how an otherwise good person can be capable of such atrocities, or how a leadership can condone a policy of extermination and still think they are doing the right thing, or how a minority group can become so dehumanised and marginalised that a group like the Nazis can come to power in the first place. What has historically geared a society to genocide?
The best way i think to understand this would be information on the individuals involved themselves? Did any of the SS guards keep a journal. Is there a good Heinrich Himmler biography that goes into detail about his ideological beliefs? He is considered the architect of the holocaust. What did he tell the SS when he was asking them to exterminate entire demographics of people? How did he justify what he was asking?
A professor of mine, Michael Bess, wrote a book exploring morality in the war, and he has a chapter dedicated to the ordinary men who carried out the Holocaust. I can't speak to the justifications behind the orders, but I can relay some insight as to "how an otherwise good person can be capable of atrocities."
Bess on a reservist whose police battalion was tasked with killing Jews in Poland, p.114
A thirty-five year old metalworker from Bremerhaven even found a way to construe "mercy" in what he was doing: "I made the effort, and it was possible for me, to only shoot children. It so happened that the mothers led the children by the hand. My neighbor then shot the mother and I shot the child that belonged to her, because I reasoned with myself that after all without its mother the child could not live any longer. It was supposed to be, so to speak, soothing to my conscience to release children unable to live without their mothers."
Bess argues that the ordinary men of that particular police reserve battalion
"experienced the values of group loyalty and comradeship in a deep way, for example, and those who broke with the group by refusing to participate in the battalion's atrocities ofter experienced harsh guilt rather than relief: noncooperation, in their twisted moral world, had become a form of wretched betrayal."
I'll leave the rest of your question -- especially the philosophical leadership questions -- to others more qualified than I, but the men on the ground who carried out the Holocaust (as opposed to directing it) were swept up in a powerful group identity that inverted traditional moral norms, rewarding those who were able to carry out the most horrific of crimes.
That being said, there are many who emphatically disagree with that point of view, and as of late, there has been a new push to prosecute surviving rank-and-file soldiers who participated in the Holocaust.
SOURCE: Michael Bess, Choices Under Fire: Moral Dimensions of World War II (2006)