The film was directed by Giuliano Cenci with assistance from his brother Renzo. During production, Carlo Collodis grandchildren Mario and Antonio Lorenzini were consulted. The subtle movements made by fidgeting children whilst speaking or under scrutiny were incorporated into Pinocchios movements, particularly when he lies to the Fairy with the Turquoise Hair over the fate of his gold coins. For the design of the Fairy, Italian portrayals of the Blessed Virgin Mary in art were used as starting points.
In an imaginary northern European country during the High Middle Ages, two leaders of a barbarian village fight to gain power: one is good and right and the other is an evil selfish. Who will have it?
The historic clock of a small town needs to be repaired but there is no money in the town coffers to pay for it. Don Paolo (Peppino Spadaro), the Priest, raises the money by lottery and thinks the surplus should go to the poor. The Communists and Socialists object because they are afraid the priest will get the credit and they claim it as "the people's money." The democratic mayor (Arturo Brogaglia) can think of no solution other than organizing committees and sub-committees. Finally, Rocchetti (Paola Stoppi), the town mechanic who has no answers for town problems and hates the clergy and politicians alike, comes forward and repairs the clock for the sheer joy of work.
Agostina is a maid turned prostitute during World War II. She sends all the money she makes to the local priest in her home village for safekeeping. After the war is over Agostina and her friend Australia plan to open a clothing store so they return to her home island to collect the money from the priest. But after arriving there Agostina learns in shock that the priest has been dead for more than a year and that his eccentric successor mistook the received money for donations and spent all of it on building a new orphanage for war orphans. To make matters even worse, other islanders think that Agostina is now a millionaire and beg her to help them financially.