I've been silently reading this thread up until now. There's a lot of arguments and reasons given for what "the" problem could be, although we can agree it's a collection of many issues piling up.
A lot of wise words have been said so I'm not going to repeat those. I could talk for days about how bad OOC venues like Discord are for the betterment of the server, but since it's already been mentioned I'll spare you

I will add my own take to what one of problems
could be, or at least that I've seen recently.
The must-win mentality. It seems to be very prevalent on our server today, perhaps more than ever before. So much so that people take IC events personally on an OOC level. And I am not just referring to rulebreaks. Those need to be reported, naturally.
Speaking of win-mentality, my partner made a really interesting observation. He plays a lot more of a variety of games than I do and he told me that people are more "try-hard" in most genres of games than ever before. Naturally we see that spilling over from other games to Arelith. I wonder if the rise of achievements as well as the incentive to do better in most mainstream games has sort of created this must-win mentality in gamers today.
I think it's important to make the distinction that Arelith is not a PvP game where your wins and kills score you a higher rank. Similarly, there is no achievement waiting for you when you reach level 30, or when you own the biggest piece of property on the server.
At the end of the day, we're all here to have fun and tell a story together. I'm not sure how this can be achieved, but the must-win mentality must go. I can only work on my own self and strive to create a healthy environment where RP is fostered and stories become legends.
But we must do this together. We're in this together. Arelith isn't a solo singleplayer campaign. It isn't your playground. It's not even your story. It's OUR story.
We've always made it a principle here to think of the other player and their enjoyment. This is perhaps more true than ever now.
To be more specific, I'd like to remind everyone that character-agenda is not necessarily (and in my opinion, should not) be the same as player-agenda. If there's someone you don't like as a player don't just have your character be automatically hostile towards them. We've seen it before in forms of exiling and killbashing with silly justification that barely makes the pass.
I'm not saying this to call out anyone. I'd like for all who read this to be encouraged to do better and to focus on the game rather than petty OOC squabbles over something that happened in-game (again rule-breaks must be dealt with, and disrespect towards a player is in that category).
I've had these talks with people from here often and we agree that your character is not your. Your character should not be you. It's played by you, and by all means, there's always going to be an essence of you within the characters you make. But you are not your character. You don't have to things personally and be offended because someone called your character names.
This can get difficult as we get very invested in our characters, so when our character experience some kind of loss (eviction, exile, death, theft, or however it may look like), we tend to take it to heart because we invested time and energy on building up this character.
But at the end of the day, it's just a game. The person behind the screen is another human. And like yourself, that human is worthy of your respect and you of theirs. Anything less than that needs to be reported and yes, many of you are correct, the Staff should be reliable in the way they deal with this. Similarly, they can't do their jobs if there is no trust from the playerbase.
But if we can't even trust our fellow players, what incentive do we have to trust the DMs and admins? It has to start somewhere.
There's no magic bullet solution to this other than we as players sitting down and deciding to respect each other. It's only right and it's only humane that we do.
I'll start by saying I'm not a prime example of the perfect player. I've had my fair share of frustrations voiced in wrong ways in the past. I will freely admit that, and I'm sure I don't stand alone. But we grow as people, we grow and we learn from our mistakes. And there HAS to be room from our playerbase to allow such growth to happen. Resentment and bitterness only leads to a dead server, I've seen it time and again on this game and on NWN2 RP servers.
Players need to let go of past gripes. What's done is done, and slandering, gossping, beating the bush around an old mistake that has since been rectified is only going to lead to pushing players away from here.
Note, this entire post is aimed at the players, not Staff. If we can't have a decent playerbase that behaves well, we do not deserve fair admins.
EDIT: Typos and punctuation
EDIT again: A couple additions. I promise I'm done