The KMT rode to power under the popular leadership of Sun Yat Sen, the father of modern China, from a colonial Empire. KMT became the ruling govt, the legitimate govt and the elites of the day were nearly all with the KMT. And the power of the KMT resided in the thousands of generals that they promoted to rule China. The reasons for KMT to lose power were unimaginable then when they were in power. The CCP was too weak, peasants with little support initially and mainly from the farmers and workers, not highly educated elites and aristocrats. The businessmen, the landlords, the politicians and generals were all KMT or KMT supporters or sympathisers. But eventually KMT lost China to the supposedly very weak opposition, with few talents and no experience in running a country.
When the foreigners ie Japan and the West were carving out China, KMT did not see that as a problem. When the Japanese started to occupy the eastern part of China, the KMT ceded the territories to them, withdrew to the West. The main preoccupation of the KMT was not foreigners or foreign occupation of Chinese land, but the opposition, the CCP. They believed that as long as they were the govt, controlled the govt and the military, the business elites, intellectuals, aristocrats and landlords would be with them and they could rule China forever, even with foreigners everywhere.
So the KMT spent all its resources and time oppressing and suppressing the opposition while ignoring the growing presence of the foreigners. It was ok for foreigners to occupy parts of the country as they were seen as lesser threats than the local opposition. In many ways the KMT was colluding with the foreigners, even helping the foreigners to fight the CCP and ignoring the plight of the people. It was great time for the foreigners as they increasingly encroached into China, even when they were occupying all the major cities and eastern part of China, they were literally left alone to do as they pleased.
As for the people, they were treated as non entities, to be taxed and bullied, to be robbed of everything. The people of China then had nothing, no land, no homes, as land and homes were owned by the govt and the rich landlords. And they carried the burden of the KMT govt and their wars against the local opposition, not the foreigners.
The KMT also relied a lot on the Americans to protect their interest as the govt of the day. They thought that with the American support, they could continue to rule China and the poor and helpless and jobless Chinese people. And why not when the people were powerless and allowed themselves to be bullied and ruled by the KMT without resistance.
It took many years of abuses of power and corruption in the KMT govt before the people realised that the opposition CCP was their real saviour, not the corrupt govt of the day. And it took the full force of the foreigners and their intent to conquer and take over China before the KMT realised that the foreigners could not be ignored. By then it was too late. The foreigners had taken over nearly all the eastern part of the country and the people had fled to join the opposition.
The only thing left for the KMT, the legitimate and powerful govt with many incompetent generals and the corrupt administration and landlords was to run away. And they ran across the strait to Taiwan, with the loot and treasures of China, leaving China and the Chinese people ever poorer. The KMT warlords, generals and the rich businessman and landlords continued to enjoy their wealth overseas, in Taiwan and in the USA.
The big question, how could a legitimate ruling govt, with all the elites, rich landlords and businessmen and all the talented but corrupt generals and govt officials eventually had to flee China, and ran away in defeat? Did they not see their corrupt ways, their bullying and exploitation of the people leaving them homeless, with no land and no homes, poor, jobless and hapless, and also allowing the foreigners to enter China freely, with little resistance, and the people at the mercy of foreigners, would eventually lead to the lost of trust among the people and the people turning against them? Mind you, till today, the KMT still clings to the image of Sun Yat Sen as the father of modern China to lend them credibility. Other than the father of modern China, the KMT has no more legitimacy as an ex govt of China. There is a huge memorial in Taiwan of the father of modern China.
Can history teach us anything about powerful govts falling and having to run away with their loot? All corrupt govts that bullied and cheated their people and in cahoot with foreigners at the expense and well being of the people of their country would lose the support of the people and their right to rule.