At the end of the Third Punic War, the Romans laid siege to Carthage. When they took the city, they killed most of the inhabitants, sold the rest into slavery, and destroyed the entire city. Some accounts also have it that they sowed the ground with salt so that nothing could ever grow there again, though this is probably only a legend. As Tacitus said in a different context, "they make a wasteland and call it peace."
By extension, the term "Carthaginian Peace" can refer to any brutal peace treaty demanding total subjugation of the defeated side.
Modern use of the term is often extended to any peace settlement in which the peace terms are overly harsh and designed to perpetuate the inferiority of the loser. Thus many (the economist John Maynard Keynes among them) deemed the Treaty of Versailles to be a "Carthaginian Peace." The Morgenthau Plan, which was dropped in favor of the Marshall Plan (1948 - 1952), might be described as a Carthaginian Peace, as it advocated the 'pastoralization' (de-industrialization) of Germany following her 1945 defeat in World War II.
General Lucius D. Clay, deputy to general Dwight D. Eisenhower who in 1945 was military governor of the U.S. occupation Zone in Germany, and who would go on to replace Eisenhower as governor and as commander in chief, U.S. Forces in Europe, would later remark regarding the occupation directive guiding his and General Eisenhower's actions in occupied Germany: "there was no doubt that JCS 1067 contemplated the Carthaginian peace which dominated our operations in Germany during the early months of occupation.