From what I could tell, the reason Irene was institutionalized was because she rejected the self absorbed, self satisfied socialite/elite lifestyle. Was that a crime in 1951 Italy?
She actually gave a rat's butt about the poor people as human beings instead of treating them like dirt.
Life is never fair, and perhaps it is a good thing for most of us that it is not.
She was charged with aiding and abetting a fugitive from justice. Through machinations of her husband, a leading diplomat, she is institutionalized for both selfish and altruistic reasons (selfish: her husband is unable to understand how she can help a "street criminal", and can only surmise that she is infatuated with him--remember, she's unavailable to support him in his own grief; altruistic because he believes she needs the rest she didn't take immediately after their son's death and will recognize her plight in being locked up temporarily and become her old self again.
The film shows that Italy struggled to provide for its destitute following the war; that political considerations meant that needed to be explained away through other channels when necessary; and that she, depending on your point of view, either developed a messianic complex that she was determined to practice, or was merely helping the less fortunate since she knew, as the wife of a political figure, the difficulties Italian social service agencies faced at the time.
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You didn't have to be a criminal to be institutionalised, and it was relatively easy to get a 'difficult' wife (who may have merely been depressed or bored or unsatisfied) locked up in an asylum for life.
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