Hitler wrote a book detailing exactly what he would do if he ever gained power. It included targeting certain populations for forced removal and extermination. The book was, "Mein Kampf". He was in prison at the time it was written. The reason for targeting a race of people, psychologically, was to unite the German people against a common enemy within.
Once he gained power, the rest of the world never thought he would do the things he stated in the book, and pretty much considered them the ravings of an imprisoned lunatic. Hitler was voted into power. Even the people of Austria found his promises alluring. They voted to be annexed by Germany.
While Hitler was socializing and taking over every aspect of the economy, industry, and education, he did cause some improvements for the people. They raved about him, as he sold them the Volkswagen for less than it cost to make--"a car in every home". All the changes were "creeping". People lost their freedom gradually, through small changes. Then, they had no power to stop things once the full effect took hold.
Once war was declared, and while his full plan was being put into effect with "the Final Solution", many of the occupied countries collaborated with the removal of the Jews. When, rumors did escape from inside these countries, many people did not believe it was really happening. It was too unbelievable. When the Red Cross, and other people (inclusive of dignitaries, ambassadors, and press) actually went abroad to investigate the claims, they were shown camps such as DACHAU, which was not for extermination, but to hold political prisoners. It was Propaganda at its best. Photos and tours "showed how well the prisoners were being treated", which prolonged the time before it was actually realized that the Germans were exterminating the Jews. The full horror of the Holocaust was not realized until after Germany fell. I hope this answers the question you asked. How did it happen...? People just didn't realize what was going on, until it was too late.
History books bear this out. I actually was told by my great grandfather, who was a German Jew. He said that no one believed that someone would annihilate an entire race or population of people--and that is how it was gotten away with for so long.
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