The Jedi of the Star Wars prequel era clearly did not understand the famous Chosen One prophecy. The prophecy refers to someone who is destined to destroy the Sith and bring balance to the force. The Chosen One is widely believed to be Anakin Skywalker who ultimately throws Emperor Palpatine, or Darth Sidious, into the middle of his collapsing star destroyer. While Palpatine miraculously returns in Star Wars: Episode IX — The Rise of Skywalker, Anakin is still widely considered the Chosen One for bringing balance to the force by originally bringing down the Empire.
The Jedi of the prequel era did not understand the Chosen One prophecy because they did not practice a balanced study of the Force. Prophecy in the Star Wars universe cannot be understood by only using one side of the Force. The Force is all about balance and the light side cannot see past the darkness nor the dark side past the light. That means that trying to foretell the future using only one side of the Force leaves out half the picture. Moreover, by the time of the prequels most Jedi had given up trying to understand prophecy, in part because it was discouraged by Grand Master Yoda. This goes a long way towards explaining many of the Jedi's biggest mistakes of the Star Wars prequel era.
Why The Jedi Lost The Ability To View The Future With Precision
The Jedi lost the power to accurately predict the future long before the prequel era. Before the Sith were created, Jedi did not have the same aversion to the dark side. That does not mean the Jedi were dark side users, but rather they tried to serve balance in the Force. However, when the Sith came into being the Jedi became the opposition to the Sith and dark side users in general. They came to fear and avoid the dark side and because of that lost their ability to precisely predict the future. Without a balanced approach to the Force they could see only half the picture at best.
The Prequel Jedi Discouraged Studying The Jedi Prophecies
Prequel Jedi, especially Master Yoda, discouraged the study of Jedi prophecies. Yoda believed that trying to control the future was something of the dark side. Instead, Yoda believed that Jedi should trust in the Force and let the future be what it would be. However, if Yoda was vulnerable to the dark side, his mind might have been clouded when making this judgment. Regardless, Yoda and others discouraged the study of prophecies which contributed heavily to their misunderstanding of Anakin Skywalker and the Chosen One prophecy.
It seems short-sighted of Yoda to discourage the study of the prophecies entirely. Trying to control the future may well be of the dark side: however, understanding what is to come is not the same as trying to control the future. By understanding a prophecy, it's possible to lay preparations or make considerations for that future event without trying to control or change it. Some of the blame for the Jedi's failure to understand the Chosen One prophecy, therefore, lies with Yoda and the other masters who discouraged the study of the prophecies.
Dooku's Fall Could Have Influenced The Jedi
The fall of Dooku to the dark side likely influenced the way the Jedi saw the study of prophecy. Count Dooku was one of the last Jedi to study the ancient Jedi prophecies. Since Dooku later turned to the dark side, it was likely assumed that his study of the prophecies contributed to his turn. Yoda in particular is likely to have been influenced by this because Dooku was one of his students. Yoda probably already had some misgivings about the study of the Jedi prophecies and the loss of his apprentice to the dark side could have amplified them substantially.
Coincidentally, it is the former apprentice of Dooku, Qui-Gon Jinn, who finds Anakin Skywalker and speculates that Anakin may be the Chosen One. Qui-Gon clearly had some experience with the prophecies from his time with Dooku, yet Qui-Gon did not seem to be scared of them the way other Jedi were. It is possible that without Dooku's influence on Qui-Gon, Anakin Skywalker never would have left Tatooine.
Ultimately, it was their fear of the dark side that prevented the Jedi from understanding the Chosen One prophecy in Star Wars. The Jedi in the prequel era had long since stopped the service of balance in the Force. They practiced only the light side of the Force and because of it could not get a full picture of any prophecy. Many Jedi feared the study of prophecy as a whole and this led to an overall lack of knowledge in this field resulting in their misunderstanding of the most important prophecy of all.