Though don't expect events in the Stepstones to play out like canon because I feel like how the show handled it (Daemon and Corlys somehow being on the verge of losing after two years of conflict) was more due to the needs of the narrative structure season one had and the general entertainment need for a big climatic fight than it making sense story wise. So just keep that in mind going forward.
That *is* a bit silly, given dragons make any major fleet battle basically a guaranteed win, but I suppose if the triarchy was pulling brutal guerrilla war tactics on *every* island along the way, Corlys could believably be running into manpower issues after having to send in the infantry to root them out. I doubt he can really match the manpower of 3 city states with just the narrow sea houses. Especially if they were sending people to storm fortifications to take them intact instead of melting them with dragons. They *are* rather hesitant to jump straight to Harrenhalling places in the show. I wouldn't really call that losing per se, but running low on men and money from fighting the war without support from the rest of the kingdom could definitely turn it into an ugly draw.
The books depicted it better. In that scenario, Corlys and Daemon won after two years of slow but not really in doubt fighting (originally against mostly pirates sponsored by the Triarchy). Then the Triarchy allied with Dorne and started sending forces more openly. It was still a proxy battle, but it's a bit more difficult to
hold all the islands with a dragon than it is to take them. The Triarchy wasn't
winning exactly, but they were draining Corlys coffers, and straining Daemons patience.
Then Rhea Royce died, and in the books Daemon was in the Stepstones at the times, so it's a bit more likely that he was not involved (despite the rumors). Daemon thought he could try to claim Runestone, and he was rebuffed. While he was distracted, the Triarchy made progess in reclaiming islands, and then Daemon was too bored to fight much anymore. He killed Laena's betrothed, and married her, which I think Corlys thought would bind him to him, but instead went off to Pentos and without Daemon's dragon, Corlys just couldn't hold onto the Stepstones himself.
The real reason they couldn't hold the Stepstones was a combination of the reason Aegon was unable to hold Dorne, (dragons are great at taking territory, not holding it) along with Daemon losing patience with anything that require constant hard work.
The books are very clear that this was a problem with Daemon, give him a deed to accomplish and he would do it with dispatch and daring (and often bloody minded ruthlessness) but give him a chore that he must constantly do without end and he grows bored and runs off to do something else. The conquest of the Stepstones actually kept Daemon's attention longer than anything else he did.
