Either, the defeated people may lose their sense of organization, fail to decide on leaders and methods, and give up because they can no longer fight as a group. This happened to the American Southerners in April, 1865. The President and Cabinet of the Confederate States of America got on the train at Richmond; the men who got off farther down the line were "refugees." Something happened to them and to the people about them, so that Mr. Davis no longer thought of himself as President Davis, and other people no longer accepted his commands. This almost happened in Germany in 1945 except for Admiral Doenitz.
Or, the defeated people can retain their sense of organization, and can use their political organization for the purpose of getting in touch with the enemy, arranging the end of the war, and preparing, through organized means, to comply with the wishes of the conquerors. That happened when Britain acknowledged American independence; when the Boers recognized British sovereignty; when Finland signed what Russia had dictated; and when Japan gave up.
Sometimes these things are mixed. The people might wish to make peace, but may find that their government is not recognized by the enemy. Or the victors may think that they have smashed the enemy government, when the new organization is simply the old one under a slightly different name, but with the old leaders and the old ideas still prevailing.
It is plain that whatever happens wars are fought to effect a psychological change in the antagonist. They are then fought for a psychological end unless they are wars of extermination. These are rare. The United States could not find a people on the face of the earth whose ideas and language were unknown to all Americans. Where there is a chance of communication, there is always the probability that one of the antagonistic organizations (governments)--which have already cooperated to the extent of meeting one another's wishes to fight--will subsequently cooperate on terms of primary advantage to the victors. Since the organizations comprise human beings with human ways of doing things, the change must take place in the minds of those specific individuals who operate the existing government, or in the minds of enough other people for that government to be overthrown.