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In what I've read about classical Greece - about Persian wars, Pelaponesian wars, Battle of Leuctra, Macedonia conquest...etc. - military discussion seems to be mostly about the Phalanx with a bit about cavalry. At some point, however, chariots we're a very important military advance. Why the decline (if any)? Did this decline take place elsewhere?

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There wasn't a decline, chariots were never militarily important in Ancient Greece. As Michael mentioned in his answer, the terrain simply wasn't suitable for wheeled vehicles. Chariots were used, but their role was mainly ceremonial or for races. –  Yannis Rizos Feb 11 at 11:53

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I would speculate that chariots weren't used as much on Greek turf due to their lack of maneuverability on hilly terrain. On the plains of Egypt they would have a deadly impact, but try to drag them though hills and orchards, let alone the mountains…

Persians did try to use cavalry, but even that proved to be ineffective, and possibly had cost them defeat at Marathon.

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How did it cost them Marathon? The reason they lost there was precisely because the cavalry was away. –  Jeroen K Feb 12 at 7:37
@JeroenK: IIRC at Marathons Persians counted on cavalry and disembarked accordingly; Athenians lined up the Phalanx above them on the hills, where cavalry would be ineffective; after a lengthy standoff Persians gave up and started embarking to the ships, cavalry first; when only Persian infantry remained in the field Athenian stroke. If numerically superior Persians didn't invest so much in cavalry they wouldn't have to split. It's hard to tell though whether that would change the outcome, only that Persians would have a better chance. –  Michael Feb 12 at 18:32
I follow your reasoning now, but i think it's invalid. On the open fields of Persia cavalry was a great asset, as Alexander showed when conquering them. Anyway i don't think it's about not investing in your infantry (don't forget about the 10 000 Persian Anusya) but about military doctrine: the Persian infantry was not trained as a Phalanx but as archers who where capable in close combat. To summarize, the Persians did invest in their infantry, it was just not equipped to face a Greek phalanx. –  Jeroen K Feb 12 at 19:19

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