Punching failures of reinforced concrete flat slabs and footings without shear reinforcement have been responsible for a number of catastrophic collapses. Despite intense scientific efforts in recent decades that have led to failure criteria-based phenomenological models, our current mechanistic understanding is still not sufficiently advanced to fathom the physical background of punching phenomena in RC structures. That is why, this paper proposes a novel two degree of freedom mechanical theory - called Punching Shear Response Theory (PSRT) - that interconnects all relevant effects of punching shear behavior, namely strutting action within a conical concrete shell at the slab-column interface, shear transfer actions elicited along the circumferential punching shear crack, including cohesive fracture process zone behavior, aggregate interlock and dowel action of reinforcement, as well as transfer of normal forces within tangential and radial cracks between slab segments in one all-encompassing algorithm. The PSRT can thoroughly mimic and efficiently reproduce the entire punching failure process of flat slabs and squat members (footings, pile caps, column bases) including prediction of pre- and post-peak punching shear vs. deformation response, quantification of different punching shear contributions and analysis of their evolution and mutual interaction within the failure process. The paper illustrates the analytical development of the PSRT, exemplifies its ability to reproduce the punching shear response of selected benchmark problems, proves its validity by database evaluations (incl. punching strength and deformation capacity) and eventually discloses the physical causalities of punching failures in RC structures.