My situation is that my grandparents came to Australia just before WWII but were forced to renounced their citizenship during the war. This is the crucial bit of information, they were forced to naturalize as Italy was the enemy at that time.
When my father was born in 1952 he was subsequently born without Italian citizenship and hence myself and my brothers as well.
I would like to know if it is possible for my grandmother to regain her citizenship to Italy and for it to be passed down through my father to me?
Have there been any developments in the last few years about this?
Italy would not accept the argument that your grandparents were "forced" to naturalized. Naturalization is a voluntary process even during wartime (although they likely thought it prudent to confirm their commitment to their adopted country, one that was at war with Italy).
Your grandparents can reacquire their citizenship by stating their intention to do so at the local consulate and then establishing residence in Italy with a year. The process should be outlined on the website of the consulate. Because your father is an adult, however, their reacquisition would not affect his (or your) status. You both will be able to naturalize after residing in Italy for three years.
No, there have been no recent changes in the law that would apply to your case; nor is there likely to be any such change. This is a straight case of loss of citizenship through naturalization.