Final answer:
The War of Spanish Succession highlighted Spain's decline by showing its inability to resolve a succession crisis without European intervention, its diminished military power, and the beginning of its empire's disintegration as overseas territories sought self-rule and independence.
Step-by-step explanation:
The War of Spanish Succession clearly demonstrated how far Spain had declined from its earlier dominant position in Europe. Initially an empire flourishing with wealth from its American territories, Spain was challenged by major European powers seeking to assert their own interests upon Charles II's death without a direct heir. This internal dynastic dispute exposed Spain's diminished military and political power as the rest of Europe intervened to contest the succession.
Spain's choice to leave the crown's possessions to a French duke sparked a war as the Austrian Habsburgs also laid claim to these lands. The ensuing conflict, which involved multiple European powers, overshadowed Spain's ability to assert its sovereignty and manage its vast empire effectively. This was a clear sign that Spain's influence and strength in European politics had waned significantly.
Moreover, the inability of Spain to defend its colonies during this period, as seen during conflicts with Great Britain and France, and later during the Napoleonic invasions, demonstrated the empire's vulnerability and further weakened its grip on its overseas possessions. The Peninsular War exhibited Spain's decline as its colonies began to exercise self-rule and entertained aspirations for independence, capitalizing on the political turmoil in the motherland.