Where can you get great food for a song, combined with free entertainment and the chance to buy local handicrafts? Try a sagra. We've just returned from a medieval festival called "Anno Domini 1100" in the Little Lunigiana village of Castello di Regnano, a place we wouldn't have discovered at all if we hadn't read the signs along the highway noting the festival they hold in the medieval hilltown near the via Francigena pilgrimage route. That tray I'm holding, containing enough local food for two of us, only set us back 5€. A glass of wine would have added 1€. The food included locally produced tortas (filled with herbs and greens, tomatoes, and potatoes) a type of fry bread fried in front of our eyes, and local home made salami.
If you have a car in Italy, check out the colorful signs at any intersection during the summer. They're probably announcing a local "festa" or "sagra" that'll give you a better idea of local life in Italy.
Other Inexpensive eats in Italy: Antica Osteria da Giovanni in Rome
Travel Help from the Italy Glossary: What is a Sagra?