In September 1943 the Italian surrender caused a political vacuum in the Balkan Peninsula, which the Germans filled. The German postal authorities took over the post in Albania, Montenegro, Kotor, Macedonia, Laibach (Ljubijana), Zante and Zara.
Zara was an Italian enclave on the Dalmation coast of former Yugoslavia. It had previously been part of the Austrian Empire, but had been taken over by Italy in 1919 as a naval base and the postal service became part of the Italian postal authorities using Italian stamps.
After the fall of Italy the Germans occupied Zara and placed the postal services under German control. A few weeks later Italian stamps were overprinted with "Deutsche Besetzung Zara" (German Occupation Zara).
Almost a million stamps were overprinted, far too many for the local population. However, a number of the stamps found their way to German stamp collectors. This may have been the German postal authorities making some money late in the war? Who knows.
The lower values were overprinted between 50,000 and 100,000 times, some of the higher values, however, were very low, with only 47 or 32 examples known, which is less than a complete sheet of postage stamps!
The stamps were issued on the 5th October 1943 ( a second issue was placed on sale on the 6th November 1943) and on the town was destroyed during a heavy bombing raid on the 16th December 1943. Two weeks later the Germans ordered the evacuation of Zara, with effect from the 31st December 1943. Any civilians found in the ruins after that date were to be shot as looters.