Why did Chamberlain act to appease Hitler leading up to the outbreak of World War 2?

The Horror of another large scale war. Many believed that another large war would be much more horrific than ww1. There was a belief that "the bomber always gets through" it was thought that in any major conflict there would be many many civilian casualties even to the victors. The German propaganda about the strength of the Luftwaffe was believed, and the British air defences were not regarded as being up to scratch.

Chamberlain didn't want to start a massive European war, like the one World War One was. Chamberlain wished to appease Hitler to prevent it. Ultimately he failed in cancelling a long-term war, but in the short-term, (around 1938) he delayed the war for a whole year, allowing one more year for Britain and France to rebuild against the Germans. However, if Chamberlain threatened war, it would've stopped the German advance in 1938 as well, since Germany wouldn't be ready for a Europe-wide war until 1939. (source: World War II; the events and their impact on real people)

Hitler put up a cogent argument from the German perspective that prior to 1918 Czechoslovakia had simply been a part of Austria and Czechoslovakia's independence had therefore isolated and disadvantaged large communities of Germans outside of Germany's new borders. It is the same argument playing out now in the eastern Ukraine as pretext for Russian intervention.

With Anschluss in Austria, Hitler felt empowered to seek "reunification" of the old pre-1918 Austria and thus issued a series of demands known as the Carlsbad Program. Edvard Benes rejected Hitler's demands and mobilised the Czech Army. A propaganda war emerged and lurid false tales of Sudeten Germans being abused by Czech forces were relayed to Britain. The Nazis instigated a series of mass demonstrations and protests by Sudeten Germans inside Czechoslovakia.

In talks with Hitler attempting to avert a crises Chamberlain agreed with Hitler to appease him. France and Britain gave the Czechoslovaks an ultimatum: to cede all the territories with a German population of 50 percent or greater to the German Reich in return for the security of knowing Czechoslovakia would remain independent. Czechoslovakia replied with a resounding “no.”

Finally in September 1938 the Czech position faltered when Mussolini withdrew Italy's support for Czech independence. Benes refused to resist the Germans any further without western support thus Chamberlain pulled the plug on all hope of resistance. Benes placed his country's fate in the hands of negotiation by the British and French

What is little understood however is that Czechoslovakia had very large Gold reserves lodged with the Bank for International Settlements in Switzerland so Chamberlain and Daldier negotiated the Munich Agreement with Hitler to permit reunification of the Sudetenland. Hitler undertook to go no further into Czechoslovakia but the subsequent internal collapse of what was left permitted Hitler to take all of the country not long after.

Shamefully France and Britain tied their acquiescence to German demands with their obtaining a share of the loot and seizure of Czech Gold reserves in Switzerland as German war reparations. This is the deepest shame of what Britain did to the people of a once prosperous little nation.

Chamberlain did not merely let down the Czech people. He helped himself to that nation's Gold reserves.

The main reason was because nobody in Europe wanted another war, as WWI was still fresh in the mind and nobody wanted to relive that. He most likely hoped that Germany would stop and he wouldn't be the Prime minster in office during the second world war. This however wasn't the case and the war started anyway. The same reason other bodies didn't stop him is the one he held, they didn't want to see Britain in another war either.

Source

The Beginnings of WWII, The History Channel

My answer will probably be very unpopular here, I'm afraid. :(

One of the causes for appeas*m*nt was democracy: most people were opposed to any military actions and the politicians had to cater to the populace. In his monumental book "World War II" Winston Churchill writes about a former Prime Minister Baldwin ordering unilateral disarmament of Royal Air Force, even though he knew from intelligence reports that Hitler was taking steps to revive Luftwaffe. When asked why he was doing that Baldwin blatantly replied that he needed pacifists' votes to win the election. He couldn't quite publish the intelligence reports in the papers, so he chose to act as blindly as an average voter would.

Initially, Hitler's position regarding Czechoslovakia was considered "reasonable" by Chamberlain and others.

"Czechoslovakia" was an artificial creation, as evidenced by the fact that the two parts separated voluntarily in 1992, after the end of the Cold War. In 1938, the country had seven million Czechs in today's Czech Republic, three and a half million Germans (in the Sudetenland), two million Slovaks (in Slovakia), plus some others, mainly Ruthenians and Hungarians.

Originally, Hitler's demands for the "repatriation" of the Sudetenland, and its Germans seemed "reasonable." Even the Czechs were willing to give up almost half of the disputed territory to reduce the "minority" (German) population. The problem was that the cession of the mountainous Sudetenland in 1938 left the rest of the country defenseless against invasion.

When Hitler swallowed ALL of the Czech "Republic" in 1939, Chamberlain woke up, and signed a mutual assistance treaty with Poland, the next likely victim. But Hitler's "salami" tactics had confused the issue long enough for him to succeed.

There's another reason that I don't see fleshed out in any of the existing answers and that is that Britain lacked the means for war in 1938.

Max Hastings, in his book "Inferno: The World at War 1939 - 1945" argues that the British (and French) did not have the military equipment or trained men to go to war and that even their treaty to intervene on behalf of Poland was more about deterring Hitler than about any realistic effort to save the Poles.

Hitler did not anticipate the British and French declarations of war. Their acquiescence in his 1938 seizure of Czechoslovakia, together with the impossibility of direct Anglo-French military succour for Poland, argued a lack of both will and means to challenge him.

There are several references to Britain's soldiers being under-prepared and poorly equipped in the early chapters of the book.

Additionally, Britain's main strength was its navy, which was not a valuable asset in a continental war. In 1938 Britain's regular army consisted of 230,000 men, distributed around the Empire, mostly employed as policemen or peacekeepers. I can't find a precise, cited number for Germany's army in 1938, through a Google search several online sources give a size of around 36 divisions with a strength of around 600,000.

This lack of military preparedness and strength in comparison to Germany should therefore also be considered as part of Chamberlain's reluctance to go to war.