Ahh, one of my fetish PoDs get discussed again.

Now, in order to accomplish Grossdeutschsland unification, you need to a)break the power of the Hapsburg Empire or of Prussia b) to create a clear political separation between the Austrian and Hungarian halves of the Empire (at the very least personal union) or better independent Hungary c) to have Russia and France too busy/weak to interfere or mollified enough with concessions to go along with the process, d) either Prussia or Austria must be willing to take the lead of the German unification movement.
Barring radical divergences from previous PoDs, there are two main hotspots where this may be accomplished, 1848 and 1866-1867 (the latter two are slightly different PoDs, but close enough to be treated as one).
The most easy way to accomplish this is to have a collapse of the Hapsburg Empire, with a successful independence movement of Hungary, and a Prussia which takes the lead of German unification.
First case, 1848: Russia is kept busy by an early Polish revolt (PoD 1), France is paralyzed by its own revolution (OTL), either the Haspburg army suffers a severe defeat in the war with Sardinia-Piedmont (PoD 2a), or, alternatively, the Hungarian Diet recalls the Hungarian troops before Radetsky is able to win the Italian war (PoD 2b).
As a consequence, the Empire loses the war in Italy and whatever residual prestige, so it is unable to suppress the Austrian liberals and Hungary claims independence early. The Empire falls into complete chaos.
The Frankfurt Parliament implements the
Großdeutschland solution and offers the crown of the German Empire to the Prussian King Frederick Wilhelm IV, who is either persuaded to accept or abdicates in favor of his brother Wilhelm I (PoD 3a). Alternatively, there is a successful liberal revolution in Prussia (PoD 3b), and the Frankfurt Parliament offers the crown of the German Empire to Archduke Johann of Austria.
In the face of Hapsburg chaos and Russian repression, Czechs and Prussian Poles agree to be part of
Germany for minority rights (schools and laws in their own languages and German). Sardinia-Piedmont is able to seize Italian areas from the collapse of the Hapsburg Empire, gaining much prestige, revolutions sweep the minor Italian states, and the Kingdom of Italy is proclaimed under the leadership of the Savoia.
Second case, 1866-1867: Russia can be win over to the partition of the Hapsburg Empire by offering Austrian Poland and Galicia and Prussia's assent to remilitarizaion of the Black Sea (easily accomplished butterfly if we have a competent Prussian government: Bismarck most definitely qualifies). France needs to be sufficiently distracted and/or demoralized elsewhere (troubles in Mexico or intervention in the ACW or a nasty colonial war), or isn't willing to act against the Prussia-Italy-Russia coalition, and Napoleon III being the always willing type to prefer territorial gains by diplomatic maneuvering over military intervention, can be (temporarily) win over by promises of territorial gains in Belgium or Luxembourg.
The Hapsburg Empire collapses because a) the Austrian army of the North is completely destroyed in the battle of Koniggratz (PoD 1a) or the Kaiser and the generals are able to get their strategy through with Bismarck and the Prussian army wins another great battle after Koniggratz (PoD 1b) or the Austrian army of the South is destroyed by the Italians at Custoza (PoD 1c) or the Italian fleet wins at Lissa and the Italians land troops in Dalmatia (Pod 1d). Any of these events causes the total military defeat of the Hapsburg and complete loss of prestige of the dynasty. As a consequence, either at the end of the war, or soon after, the Hungarians successfully rise up again and claim independence. Alternatively (PoD 1e) the Ausgliech negotiations fail and Hungary chooses independence.
Anyway, Bismarck sees the writing on the wall for the Hapsburg and organizes the partition of the Empire between the Prussian-led German Confederation, Italy, Hungary, and Russia. Austria, Bohemia, Moravia, Slovenia, and Austrian Silesia are either paritioned between Prussia and Austria, or set up as a Kingdom of Austria (Franz Joseph abdicates and leave the throne to his son Rudolph) which becomes a member state of Germany. Italy gets Trento, Trieste (with customs privileges for Germany), Istria, and Dalmatia. Russia gets Austrian Poland and Galicia. Hungary becomes an independent Kingdom (either a personal union with the Kingdom of Austria or another Hapsburg or a catholic Hohenzollern, but the first two solution are more pleasant to the rest of Europe) with Croatia, Slovakia, and Transylvania.
There are other possible PoDs which involve the Hapsburg taking the lead of German unification but they are rather less likely, so I'll leave their discussion to others.
Now, it is quite possible that France once it manages to put its business into order and/or realizes that compensations aren't coming, will attempt to regain continental leadership by a quick war with Germany or Italy. Either in 1850 or in 1870, this will almost certainly fail since Germany and Italy will close ranks against expansionist France and French military resources and generalship are insufficient to the task in the mid-late 1800s (unless Napoleon I gets a sudden reincarnation in his nephew). So it is the march on Paris all over again and France says goodbye to Alsace-Lorraine, Nice, Savoy, and Corsica.
Anyway, this scenario is in both PoDs a best case TL for Germany which paves the way to its decisive victory in any future general European war and continental hegemony in the next century. Germany has accomplished complete national unification and got the best parts of the Hapsbrug inheritance, which they can put to best use with their efficient economy and administration (the Czech minority will not be as much difficult to manage for Germany as for A-H), and got an ally in the Balkans rather more vital than A-H.
They will also be able to create an unbreakable alliance block with Italy and Hungary, since the former has no irredentist claims on its allies and needs them against revanchist and colonial rival France, and the latter needs their support to keep an hold on her minorities and against irredentist neighbors (Serbia, Romania) and their expansionist Russian sponsor, and the Ottomans.
Germany, barring ASB levels of diplomatic incompetence, will be able to win at least one of Russia, Britain, and the Ottoman Empire as an ally. Barring ASB bad generalship, this means they shall almost certainly win any WWI scenario and build Mitteleuropa and/or an early European economic union out of the spoils of Russia or France. Butterfly away German Nazism and Russian Communism is greately weakened or butterflied away.
Now, most likely there is still a big war in Asia coming in the 1920s-1930s to settle continental hegemony between UK, USA, and Japan. This may or may not expand to Europe and blossom into WWII if Russia gets seriously revanchist (possibly some kind of nationalist authoritarian or fascist regime) and Germany is complacent and/or busy to keep the Balkans in line enough to let it go unchecked. France too might well fall to a nasty authoritarian or fascist regime under the weight of defeat, humiliation, and economic unrest. Communism in Russia or France is possible but it would require the Allies to be too exausted to crush it (possible in Russia, rather unlikely in France) or to occur well after the war (unlikely, never happened in Europe without a war OTL).
If this happens, unless Germany and Italy get so complacent as to let their military power decay seriously or completely estranged, they will close ranks with either/both UK/USA and win WWII too. However, revanchist nasty Russia ought to be significantly easier to defeat than revanchist nasty Germany, so this WWII has good potential to be less destructive than OTL.
As it concerns the Holocaust, it is well possible it gets butterflied away entirely or gets minimized (France goes an antisemitic genocidal regime). However, if Russia gets an antisemitic genocidal regime, and seizes most of Central/Eastern Europe during the war (esp. Poland and Hungary), the body count may blossom to something resembling OTL, but not come close (unless Russia sweeps the continent, and then she becomes difficult to dislodge: enter ATL Cold War).
Overall, this kind of scenario offers excellent potential to turn up a rather more favourable outcome for the world (besides my strong Germanophile sympathies, the reason why I fancy this PoD a lot and eventually will make an TL out of it), as most of the nastiest and most destructive phenomena of the 20th Century (Communism, Nazism, the Holocaust) are most likely butterflied away or seriously downplayed in magnitude.
The TL will only look an unfavourable outcome if you are a French nationalist (Russian nationalism will get a severe thrashing too, but most likely Russia is spared several decades of nasty dictatorship) or regard the OTL current cultural dominance of political correctness/pacifism/anti-imperialism an absolutely necessary outcome no matter the body count.