Question:
The First World War ended when an armistice was signed between the Germans and the Allies. At that point, while Germany had no realistic hopes of winning the war, they had no enemies within their borders and still had troops in enemy territory......The armistice wasn't officially a surrender, but apparently the terms were not very good for a country that wasn't really defeated.
The phrase, "for a country that wasn't really defeated" is incredible misleading and mistaken. Germany was entirely defeated in WWI.
After 4 years of fighting, Germany was exhausted militarily, economically and culturally.
So what happened in Germany in the last two months of the war?
The string of military defeats Germany endured in the allies "the 100 days offensive", august of 1918, resulted in large scale surrender of Germany troops in the field. Germany's chancellor under the conservative, Chancellor Georg von Hertling resigned and was replaced by the reformer Prince Maximilian of Baden. Prince Maximilian forced the resignation of General Erich Von Ludendorff, the commanding general in charge of Germany's military who fled to neutral Sweden. Germany's civilian population revolted against the German monarchy under Kaiser Wilhelm and ultimately removed Prince Maximilian from office. The German Imperial Monarchy collapsed when General Groener, the successor to Ludendorff, backed the Democratic Government under Friedrich Ebert. Thus the federal constitutional Monarchy fell and was replaced with a democratic parliamentary republic that later became known as the Weimar Republic. Groener did so because he feared a revolution such that Russia experienced the preceding year, would bring more radical and destructive factions to power, such as the communists.
Germany quickly called for and signed the armistice because their country was in turmoil not only unable to continue the war but at risk of tearing itself appart.
The Chancellorship had changed hands twice in two months. The monarchy had collapsed and no longer ruled. Their military was in disarray. Those who hadn't surrendered yet had revolted, or at least ceased to support the monarchy. Their economy was shattered. Quite literally Germany feared the radical elements inside their own boarders more than the allies in 1918. Germany's defeat was total.
One of the reasons the armistice was so one sided was that the allies feared that once Germany had a chance to address it's domestic troubles it would return to the fight. Thus the armistice first required Germany to disarm, making a continuation of the war in the near terms impossible.
Germany was ordered to give up 2,500 heavy guns, 2,500 field guns, 25,000 machine guns, 1,700 aeroplanes and all submarines they possessed (they were originally asked to give up more submarines than they actually had!). They were also asked to give up several warships and disarm all of the ones that they were allowed to keep.
How unfavorable were the terms of Germany's “surrender” in WW1?
First What are we talking about when we say Armistice:
The Armistice was an agreement signed by representatives of France, Great Britain and Germany. It was an agreement to end fighting as a prelude to peace negotiations. The Treaty of Versailles signed six months later would act as the peace treaty between the nations.
Without listing all of the terms as Wladimir Palant did in his fine answer.
By signing The Armistice and the Treaty of Versailles, Germany were made to accept the blame for the First World War and would have to pay reparations for the damage caused, estimated to total about £22 billion ($35 billion, €27 billion) in current money. It was only in 2010 that Germany paid off its war debt, with a final payment of £59 million ($95 million, €71 million).
The Treaty of Versailles is what we want to talk bout not just the armistice agreement.
In June 1919, the Allies declared that war would resume if the German government did not sign the treaty they had agreed to among themselves. The Germany government now headed by Philipp Scheidemann was unable to agree on a common position, and Scheidemann himself resigned rather than agree to sign the treaty.
The Treaty of Versailles included
Territorial changes
Stripped Germany of 25,000 square miles (65,000 km2) of territory and 7 million people.
Mandates:
Article 119 of the treaty required Germany to renounce sovereignty over former colonies and Article 22 converted the territories into League of Nations mandates under the control of Allied states.
Military restrictions.
The treaty was comprehensive and complex in the restrictions imposed upon the post-war German armed forces (the Reichswehr). The provisions were intended to make the Reichswehr incapable of offensive action and to encourage international disarmament.
Reparations.
Germany accepted responsibility for the losses and damages caused by the war "as a consequence of the ... aggression of Germany and her allies."[97][nb 2] The treaty required Germany to compensate the Allied powers, and it also established an Allied "Reparation Commission" to determine the exact amount which Germany would pay and the form that such payment would take.
Guarantees
To ensure compliance, the Rhineland and bridgeheads east of the Rhine were to be occupied by Allied troops for fifteen years.[104] If Germany had not committed aggression, a staged withdrawal would take place; after five years,
US President Woodrow Wilson attended the Versailles Peace treaty but the United States would never ratify that treaty, in part because of strong opposition to the terms of the treaty in the US Senate. German and Irish Democrats objected to the one sided terms; while Republicans who controlled the senate objected philosophically to the League of Nations which was specified in Article 10 of the Versailles Treaty. It stated the League of Nations had the authority to commit it's signatories to war without consent of the United States Congress, and this the Republican Senate would never tolerate, and thus never ratified the Peace Treaty ending WWI.