The problem with FFXII was that it tried to do too much.
You could write a paper around all the things that went wrong with its developments, but let's look at the main points.
First off, the story and characters changed multiple times in development. Basch went from being the main character to having almost no point in the game aside from his initial plot trigger. Instead we got Vaan, a character who basically travels through the game and we see the game 'through his eyes'. This would be a welcome addition to the Final Fantasy world, except its been done already with FFX. And in both cases, it wasn't done well. Because you were placed in the role of a proverbial 'every day joe' who actually turned out to be a rather ignorant douche. And in FFXII, he doesn't even have the excuse Tidus had.
But beyond this, the biggest faults in FFXII is that it doesn't hold your attention. Initially, the thought of having hundreds of NPCs to interact with in towns and HUGE areas to explore is a RPG players wet dream. However, when attempted in FFXII...it just became a chore. Running around talking to everyone in town took ages and became work. And fighting outside of town, even on the main game path, felt repetitive and areas could take hours to complete. Part of the whole 'MMO' gameplay style.
In the end, the game was too large for its own good, with too many ideas attempted. It needed some more balance. Something its counterpart in Dragon Quest VIII did much better. Dragon Quest VIII did all the same things. A vast world to explore, tons of NPCs to interact with in town, tons of extra stuff to do outside of the main game, etc. However, it balanced it all out so it didn't get tossed all at you near the end of the game (hunts) and it didn't feel like a chore.