Following the Peloponnesian War of 431-404 BCE, the political landscape of the Greek city-states changed completely. The power of Athens was shattered and Sparta found itself the dominant force in the Aegean, reaping the rewards of its conquests whilst sharing none with its allies. 
 
However, Spartan hegemony was not to last. Barely nine years following the end of the Peloponnesian War, a new conflict would commence resulting in Thebes usurping Sparta’s hegemony. This conflict is known as the Corinthian War.
 
The war’s origins can be traced back to the end of the Peloponnesian war. Throughout the war, Sparta had been supported by the Peloponnesian league. The league consisted of Corinth, Kythira, Thebes, Melos, Pylos, Mantinea, Elis, Epidaurus, Lefkada, and Ambracia. When the peace terms were agreed, Sparta claimed all the treasures for herself and granted no reward to her allies. Sparta’s allies resented the settlement. This was evident in 402 BCE when Sparta attacked the rebellious city-state of Elis. During the conflict, both Corinth and Thebes refused to send aid to Sparta. Then again in 398 BCE Thebes refused to send troops to assist Sparta in their campaign to Ionia. To add insult to injury, Thebes went on to disturb a Spartan sacrifice taking place whilst the campaigning forces were mobilizing. 
 
Initially, the Ionian campaign was extremely successful. The Spartan army, led by Agesilaus, advanced as far inland as Sardis. In response, the Persian Satrap sent an emissary with 10,000 gold darics to persuade the Greek city-states to pursue an anti-spartan foreign policy. 
 
Having previously aggravated Sparta, the Thebans were more than enthusiastic to take up the Persians’ offer. Rather than attacking Sparta directly, they decided to create a proxy war against a Spartan ally. In 395 BCE, the Thebans encouraged their ally, the Locrians to collect taxes from a territory which they contested with Phocis, a rival state. In retaliation, the Phocians launched an attack against the Locrians, which led to Locria appealing to Thebes for aid. Thebes then assaulted Phocis, which provoked Sparta into declaring war on Thebes. 
 
Whilst Sparta was mobilising, the Thebans were negotiating an anti-Spartan alliance with Athens. This alliance allowed Thebes to mobilise her forces and go on the offensive, whilst an Athenian force defended the city.
 
To punish Thebes, Sparta mobilised two armies that would undertake a pincer movement into Boetia (territory of Thebes and her allies). The two armies planned to meet at the city of Haliartus. These forces were commanded by Lysander, the victor of the Peloponnesian War and Pausanias. Lysander’s force was made up of 2000 Phocians, several hundred Spartans, and other allies from northwest Greece (Alinis, Malis, and Mount Oeta). Whereas Pausanias’s force was predominately Spartan. 
 
In the run-up to the conflict, these two generals openly disagreed on Spartan foreign policy. Lysander wanted to pursue an aggressive Imperialist policy, taking advantage of Spartan dominance following the defeat of Athens in 404 BCE. In contrast, Pausanias wanted to pursue a more traditional approach, where the state would remain dominant in the Peloponnese and ensure a balance of power was maintained throughout the Aegean. 
 
This difference in policy was evident by the divided policy pursued by the generals. The plan was for Lysander to advance from the west and Pausanias to advance from the east. Instead, Pausanias delayed his advance for several days whilst Lysander proceeded without support. 
 
During Lysander’s advance on Haliartus, his army reached the city of Orchomenus, an ally of Thebes. With a large force at his back, Lysander managed to persuade the city to revolt against Thebes and was able to add a contingent of Orchomenians to his force. This early success prompted Lysander to continue his advance, marching down the western shores of Lake Copais. Lysander’s forces met further success when they captured the city of Lebadeia. 
 
Following several early successes, Lysander’s army reached the city of Haliartus. Having succeeded in taking both Orchomenus and Lebadia through subversion, the general attempted to persuade the people of Haliartus to defect from Thebes. Lysander addressed the people of Haliartus, standing at the foot of the city gates with his army at his back. This bold move did not pay off, the Thebans had sent an advanced party to defend the city and ensure its allegiance. 
 
The situation for the Spartan army deteriorated further when the Theban army attacked the besieging force, this development took Lysander completely by surprise. The Thebans routed the Spartans and killed Lysander in the process. Fighting for their lives the Spartans took heavy losses and began to retreat. The Thebans were in hot pursuit but the remaining Spartan soldiers regrouped and counterattacked whilst on rough ground. On rough terrain the Thebans were at a disadvantage. The counter attack inflicted heavy casualties on the Theban force and they retreated to Haliartus. The remaining Spartan force disbanded and returned to their homeland. 
 
Pausanias arrived one day after the battle. He was greeted by the combined strength of Thebes and Athens who were ready to fight. In contrast, his force was isolated and disheartened by the recent Spartan defeat. Furthermore, Corinth and other Peloponnesian states refused to send aid to Pausanias. Facing a strengthened enemy, bolstered by their recent victory, Pausanias agreed to a truce with the Thebans on the basis he withdraw from Boetia. He was allowed to take the Spartan dead and marched back to his homeland in peace. 
 
Following Pausanias’ return, he was placed on trial for failing to support Lysander by the dead generals’ supporters.  Certain that he would be executed, he fled to Tegea and lived-in exile for the remainder of his life. 
 
The Battle of Haliartus had a detrimental effect on Sparta’s ability to wage war. Two political heavyweights were removed from Spartan society and the defeat was a humiliation for their military prowess. The death of two senior leaders left Agesilaos in charge and he was recalled from his campaign against Persia in 394 BCE. 
Haliartus also served as an anti-Spartan rallying cry. In 395 BCE the quadruple alliance was formed consisting of Athens, Thebes, Corinth, and Argos. They were also joined by Thessaly, Euboea, Acarenia, and Chelcidice. With former Spartan allies defecting the challenge facing the city-state was enormous. This first stage of the war was a disaster for Sparta and the impact would have lasting effects as the conflict developed.

Welcome JLight and I'm pleased to see someone else interested in discussing ancient and classical history.

The Corinthian War (in which as you say the siege of Haliartus was just the start) seems to me to have been orchestrated, or at least strongly encouraged, by the Persian Achaemenid Empire to try and weaken Sparta and the other Greek city states, while not themselves getting involved militarily. Hence the Persians supported Greek grievances against Sparta and encouraged Athens (who had lost against Sparta in the Peloponnesian War) plus her ineffective ally Argos, to form a new coalition with Corinth and Thebes (former allies of Sparta but who felt they had not been adequately rewarded). Thus when in 395 BCE while the Spartan king Agesilaus II was away in Asia campaigning against the Achaemenid Empire, this new alliance of Thebes, Athens, Corinth and Argos took their chance and launched their offensive against Sparta, leading up to the Spartan defeat at Haliartus.

But that was just the start and the war dragged on for two years. The conflict wore down the alliance of Greek city states and they failed to end Spartan hegemony over Greece, meanwhile Sparta, whilst still powerful, was also greatly weakened by the war. The Persians however, having stirred up the ants' nest, only had to sit back and watch from the sidelines. However in time as the war situation changed and it looked like the Athenian alliance might be getting the upper hand, the Persians gradually shifted their support from the Athenian Alliance towards backing Sparta - presumably just to keep both sides in check and so that there would be no clear overall winner around which the other independent Greek city states might then gather into a new anti-Persian alliance. Meanwhile, as the Spartans and Athenians continued to tear at each other, in Persia the Achaemenid court was was likely congratulating itself on its adroit diplomacy.

The war ground on to something of a stalemate and was formally ended by the Peace of Antalcidas (387 BCE), the terms of which were largely dictated by the Achaemenid king, Artaxerxes II. By this treaty it was agreed that Persia would control all of Ionia, that all Greek cities must thereafter be autonomous, thereby prohibiting them from forming alliances or coalitions, while Sparta was given the authority to enforce the terms of the settlement. Accordingly the war established Persia's interference in Greek politics, served to weaken and isolate the Greek city states from one another and affirmed Sparta's hegemonic position in the Greek political system, albeit now under an implicitly agreed Persian sufferance. Moreover Persia, now relieved of both Athenian and Spartan interference in its Asian provinces, could consolidate its hold over the eastern Aegean.

Frankly I think that the whole war, and its subsequent peace agreement, was quite a clever strategic win for the Achaemenid Empire, although in the event the peace didn't last for very long. But I welcome anyone's arguments to the contrary.