tomp asked what I think is a crucial question, that you didn't address: what does the language-specific wiki have to do with it? Wouldn't the English-language wiki be subject to the very same law? If so, how does downing the Italian version protect wikipedia?

Communication has been oblique from the Italian community, so I can only give my "best guess" answer here.

Practically speaking there is no way this can affect Wikipedia itself, because the servers are in the US. The Italians appear to be claiming that, however, this law would affect the editors directly - leading them to be fined if they write material that someone objects to (and don't fix it within 48 hours).

I'm not really convinced myself (reading the law) that this is a risk for them. But it is the reason behind their move.

(or if I was being critical; they are making a political gesture to try and stop the law, which is terrible...)

Non-US domains have been re-appropriated by the US with the rationale that a .com domain comes under US jurisdiction, and the agency behind it has gone on record explaining as much (apologies for shit reference, this is from memory)[1].

Whether or not that rationale stands or if it's even right, that same logic could be applied to websites holding a .it domain. And since some other countries require some level of incorporation within their own economy before being able to use their TLD, (don't know if that applies to Italy), there's a reasonable assumption to be made that penalties against the business running the site could be applicable.

As a purely political manoeuvre, however, I suppose that's their collective decision to protest the legislation. From the sound of it I'd find it difficult to disagree.

[1] http://www.guardian.co.uk/technology/2011/jul/03/us-anti-pir...

Well, it's certainly not safe for them to continue running under the .it TLD if they're in violation of Italian law, but they could redirect to "it.wikipedia.com" (which, I just checked, actually is the Italian Wikipedia) and thus be within the US domainspace. That seems pretty safe.

And yes, you're correct that the US has asserted control over the generic .com/.org TLDs for historical reasons. They have a "silent .us" appended to them, from a functional standpoint. So they're not safe if you're in violation of US laws, but that doesn't seem to be the situation here.

The practical reason I can see is that: 1) a large portion of Wikipedians from Italy are worried about the consequences of this law for Italian Wikipedians and wish to stage a protest; and 2) editors from Italy constitute an overwhelming majority of editors on the Italian-language Wikipedia, and are therefore able to stage a protest there, but not elsewhere (since they don't constitute an overwhelming enough majority of the other languages' Wikipedias to get consensus agreement for a blackout).

So far it seems the Foundation, which ultimately owns the servers and could intervene if it deemed the move contrary to the organization's principles, is standing on the sidelines. In part, that might be because the consensus is so strong; it wouldn't be overruling a handful of rogue admins, but a large portion of the Italian Wikipedia's editors (straw-poll here: http://it.wikipedia.org/wiki/Wikipedia:Bar/Discussioni/Comma...), which it prefers not to do unless absolutely necessary. A number of people in the organization, speaking in their private capacity, appear to also be fairly sympathetic to the protest, and not inclined to overturn it in a heavy-handed manner (perhaps there will be some informal negotiation to bring the site back online without condemning or officially "overturning" the protest).

Italian law is very unlikely to extend outside the borders of Italy. I see this as analogous to why Google can serve up content about Tiananmen Square outside of China without any repercussions

It's not about protecting Wikipedia: it's about protecting the contributors. The vast majority of contributors to Italian Wikipedia are in Italy - much more so than, say, English, where people are all over the globe.