My personal knowledge of the community goes back to 1999, though I have done research into the community’s history. There are a few others around who can give you a personal account of the community before that — I’d recommend sylvereapleanan as one of the better people to ask about it.
In my opinion, there are really two big changes that have taken place. The first is that when I found the community the majority of the people in it subscribed to a spiritual model of being otherkin. There had been some prior to this who believed that they were genetically otherkin, rather than spiritually, but they were in the distinct minority and even they generally believed in a strong spiritual aspect as well. Somewhere roughly around 2005 a change took place in the community and we began to see the rise of what are now termed “psychological otherkin” who explain the experience as literally being all in their heads. I believe this trend was influenced by a similar trend in the therian community which took place earlier and which largely supplanted the original model of “spiritual therianthropy”. This was of course coupled with a rise in skepticism towards magic, energywork, etc. Where once it was common to see people asking for someone to scan them or perform an energetic healing or sharing “energy signatures” on mailing lists and forums, now such requests are more often met with total confusion.
Likewise, when I found the community it was common to believe one had past-lives as a nonhuman. They were commonly discussed, compared and contrasted, and dissected down to the smallest detail. Entire mailing lists, forums, and LJ communities were created for this express purpose. But sometime roughly between 2003 and 2005, it began to be taboo to talk about these things publicly. Doing so was seen as “living in the past”. Instead, discussion turned to aspects of modern life that people believed expressed their otherkin nature — though how, exactly, they seemed unable to say. Mead-making, beekeeping, yogurt-making, pickling, permaculture, slow cooking — these things replaced earlier discussions of energywork, myth, magic and memories. Instead of relating to your otherkin nature as having been a specific being of a specific race at a specific time and place, it became common to relate to it more totemically. It wasn’t that you were a specific elf reincarnated, it was that you were “embodying the elven current”. Which seemed to mean whatever hobby the person was into at the time, with no adaptations or mutations from how it was practiced by any non-otherkin engaged in the same hobby.
Together, those two changes have dramatically reshaped what it means to be otherkin and the face of our community. And not for the better, IMO.