Uthan lost the Blood War moment their plan to poison the world was discovered. Their entire war-plan hinged around that one crucial step, and the moment it was discovered, and the Coalition retaliated, they were going to lose. Sure, their wealth and economic power was unparalleled, but the Coalition simply had more. More logistics, more supplies, more land, more troops, and more motivation. Most Uthani troops didn't really understand why they were fighting in the first place, and the Blood Mages that did know were few and far between. Mercenaries that simply fought for money quickly fled when the tides of battle started turning against them.
Another fatal flaw in the Uthan was the fundamental divide between the Blood Mages and the regular armed forces of Uthan. Generals and soldiers thought of them as snotty uptight warmongers, while the Blood Mages saw the conventional military as a bunch of stupid peasant filth. This made it nigh impossible to coordinate attacks or plan battles, as any collaboration would inevitably descend into a heated argument.
If this defeat was so inevitable, one would wonder why it took so long for them to be defeated. The answer lies in the unwillingness of Uthani high command to accept defeat. Soldiers resorted to scorched earth tactics, setting fire to fields and towns in Ravenna when Valdarian troops came knocking. Uthan also didn't have the same restrictions as the Coalition did, having to play by their own rules, not committing any war crimes. Uthan committed as many war crimes as they wanted, slaughtering civilians wholesale as if they were soldiers themselves. Another reason was that Uthani troops were much better equipped than most Coalition forces, able to spend exorbitant prices on the newest and best equipment, such as the newly produced muskets from Valdar.
The new Uthani war goal was to simply survive, as taking over basically the entire world with only 50,000 soldiers was impossible. This plan relied on the attrition afflicted on Coalition armies, and that anti-war sentiment would grow due to the sudden cutoff of international trade. This idea that the economy of the Coalition would suddenly come crashing down due to the limiting of over land trade was naive, due to the slightly more costly alternative of trading over the sea. Sure, it was slightly more expensive, causing the different economies to take a slight hit, but it was nowhere near the knockout blow Uthani needed it to be.
Once Uthan was backed up against the wall, the strategy was to wait out the attacking troops, and hope that they would offer a conditional surrender from which they would be able to minimize the damage done. This would prove a childish belief with the outcome of the Battle of Uthan, and the Treaty of Teckitan.