Why did Sparta fall behind other Greek city-states in many areas?

The Spartans were very Military focused, and used a lot of their resources, which discouraged the people. During the wars, they had lost a high percentage of its citizens and, unfortunately could not replace them due to their worry of outsiders attacking them. They also lost much of their territory along with population which supported the economy.

In 371 BCE it was badly beaten by Thebes. Over the wars of the previous century it had lost a high percentage of its citizens and, being a closed society, could not replace them. It also lost much of its territory and serf population which supported its economy. It sank into obscurity.