Gianfranco Zola led Watford to last season's Championship play-off final, but resigned his role as manager in December after a run of five successive home defeats.
"Things were not going the way we wanted them to go," explained Zola on Goals on Sunday.
"I think it was the fifth game in a row where we were losing at home - something wasn't going exactly as we planned. Something had to be done. It has been very painful as I enjoyed my time there - I enjoyed the company of the people I worked with but it was not clicking.
"I have asked the question [why it was not clicking] many times. I think we lost players from the year before who were very important players and the players who came in to take their place were not able to fill the gap. That was a big miss. We also lost players who did not play much but were very important within the team, players like John Eustace.
"I hold my hand up and say it was a big mistake; we could have kept John although there were some question marks about his physical conditions.
We were also a very young team and I think last year we played thoughtless - we did not think very much, just enjoyed performing. The next year I don't think the players matured - it's one thing playing for nothing but it's another when you have to perform all the time because you have to and that takes time to develop. We did not have that time.
"I made some mistakes that I take full responsibility for but the club has made some mistakes as well - it is something that we all have to share. The fact that we all had to perform and to win after what we did the year before did not help. It put everyone in a different situation - even the fans were expecting much more."
It's been three months since Zola stepped down but he has no regrets and feels that, at the time, he did the right thing.
"Maybe I could have given myself a little longer but sometimes you have to consider that someone else could do a better job than me," added Zola.
"I was not getting what I want and I was not pleased with the situation. I did not feel that it was right for me to stay; whether it was the right decision or not, well I don't know but at that moment I felt that something had to be done. It was painful but I had to do that.
"Sometimes in football things do not go the way you want them to and sometimes it is no one's fault, it is just the way it has to be."