Partly Inconsistent, Partly Bad film choices and partly unlucky
Manisha Koirala failed to give consistent hits. Every hit of her was followed by multiple flops. Her record in movies is pretty bad in terms of percentage of hits. She has worked in 64 films as a lead actress out of which only 9 were successful - Saudagar, Bombay, Agni Sakshi, Gupt, Kacche Dhaage, Company, Chhupa Rustam, Company and Ek Choti si Love Story. She was an exceptionally talented actress but she didn't even worked in proper performance oriented roles which could fetch her high critical acclaim. She could have survived longer had she done films like Bombay or Khamoshi in her later years. But rather she lapsed to B grade cinema which fastened her decline.
She was also unlucky because some of her best films failed commercially. 1942. A Love Story had everything from exceptional music to great production values and a patriotic backdrop and sensitive filmmaking but the film failed commercially. Khamoshi the Musical also had great performances and music but it also failed commercially (Manisha lost out to National awards that year because the producers failed to send the film to National awards on time). Her third underrated film Dil Se despite having SRK and outstanding music failed. Even Company did Average business. Had these films successful she would have been hailed as a great actress along with a big star.
Thirdly, one of the reasons why actresses like Madhuri Dixit or Karishma Kapoor or Sridevi were able to succeed so much was because of their successful pairing with other actors which gave them a stable career. While Madhuri Dixit was paired with Anil Kapoor, and Karishma with Govinda, Manisha Koirala couldn't establish any successful pairing with any top actor. In fact she has given flops with all the top stars be it Aamir Khan (Akele Ham Akele Tum, Manner), SRK (Guddu, Dil Se), Salman (Nischay, Sangdil Sanam, Khamoshi) etc. She was rumoured to have affairs with Nana Patekar (more than just rumours), Anil Kapoor and Jackie Shroff as well as directors like Sameer Malkan but none of that benifited her professionally
She further ruined her career in the early 2000s by doing glow budget erotic B grade films like Ek Chhoti si Love Story, Market, Paisa Vasool, Tum, Ek Second jo zindagi badal de etc. In these movies she did a lot of skin show and there were legal issues arising out of it (Manisha Koirala blamed the makers of Ek Chhoti si Love Story of using her duplicate to shoot a really inappropriate scene. She also tried to turn producer with Paisa Vasool which bombed very badly. She even tried to launch her brother Siddharth Koirala with the film Anwar (known only for its songs like Maula mere Maula mere) but that eventually ended up ending her career as lead actress. Even her otherwise decent films like Tulsi (remake of a National Award Winning film which was successful in all the languages it was made in, failed so badly that it earned only 85 thousand rupees), and I (National award winning film) failed miserably.
Lastly she missed out many good projects because of her schedules or unprofessional behaviour. Two plum projects were Dil to pagal hai and Biwi no 1. Both of those roles were done by Karishma Kapoor who reached the zenith of her career because of that. She also left Keemat after shooting for a days and was replaced by Sonali Bendre. And she left Hrishikesh Mukherjee's last film Jhooth Bole Kauwa Kaate over money. Even when she was working she was pretty unprofessional. For Sanjay Gupta’s Khauff she reported for a 7 pm shoot at 9:30 PM did her makeup etc till 11:30, shot for 2 days for a week schedule and went abroad leaving the set stranded.