The appeasement policy was based on the idea that what Hitler wanted was reasonable and when his reasonable demands had been satisfied, he would stop.
However it gave Hitler the confidence to demand more land, such as taking over Czechoslovakia, another step towards the Greater Germany. Later on Hitler demanded the Polish Corridor and Danzig in August 1939, which eventually resulted in war. The appeasement policy fueled Hitler's actions to further devalue the Treaty of Versailles. Hitler broke the treaty of Versailles by sending troops to Rhineland, in addition to that Germany united with Austria which was originally banned in the Treaty of Versailles. At the same time, Germany gained time to build up their armed force and gain more military power. The policy aggravated Hitler’s ambitions and aggressions; he decided that Britain and France were unlikely ever to oppose him by force. Germany attacked Poland which at last led to WWII.
If France and Britain had stood up to Germany then Hitler would not have been so bold in what he was doing. If they did not adopt the appeasement policy, they might be able to force him to back down without a fight or defeated Germany in a much shorter, less destructive war. Instead they kept giving Hitler what he wanted, hoping to appease him, which ended up Germany getting stronger and stronger until