The Shattering was the final paroxysm of the Sundering, when the connection between Ironfell and Arcadia was broken. As with the Sundering, there were several reasons for the Shattering:
[Effects of the Shattering: the gates to Arcadia close, the mortal world is separated basically completely from the Dreaming, all faeries except for seven of the remaining eight Houses of the Sidhe take on the Changeling Way and stay in the mortal world. The question is, why were they in the mortal world when the Shattering occured, or, if they weren't, why did they go there when it did? [And how long did undertaking the Changeling Way take - wouldn't it be more likely if the faeries were in the mortal world for a while, figuring stuff out? How long did the Shattering take?]
There are a couple of possible answers. The Sidhe, or someone, convinced the faeries that trying to encourage Glamour in the mortal world, or do something which required their presence there, would be beneficial to them and the Dreaming (repair some of the wounds?). When the Shattering occurs the Sidhe bugger off to Arcadia and leave everyone else in the lurch.
Or the Sundering caused something bad to happen in Arcadia, and everyone left it, and got pushed further and further away from it, ending up in the mortal world. Then when the Shattering occurs, the Sidhe decide that it's better to face Arcadia than stay in the mortal world.
I like the last suggestion. And perhaps another cause of the Shattering, or something which precipitated it, was the actions of the Sidhe in trying to get to Arcadia. Having been pushed mostly out of the Dreaming, the Sidhe had come together once again and formed a host. House Scathach were acting as guides/openers of the way, and the host was marching on Arcadia. The Shattering occured, House Scathach were trapped on the wrong side (ie, in the mortal world, or on the fringes of the Dreaming), and were essentially forced to adopt the Changeling Way.
The only place a real threat to the Sidhe (outside of Trolls and, perhaps, Dragons) could come from is the other side of the Gates. Once the Gate of Horn is broken by Lord Dougal, strange creatures come through it, and Sidhe are not reborn. And of course the only person who might fix the problem is Lord Dougal, but he's in limbo after being struck by the shard, his soul trapped within it.
The Gate of Horn was broken before the Sundering, but the creatures did not start appearing until after that event, and at first only rarely. But they increased in numbers, and eventually they forced the faeries out of Arcadia. They had power over the Dreaming, and using this power they managed to force the faeries further and further to the fringes of the Dreaming. It was either venture into places such as the Nightmare Realms or into the mortal world.]
The chronology of the Sundering to Shattering period needs to be worked out, in particular when the Sidhe leave Arcadia and when the Troll Revolt (and the incidents leading up to it) occur. I think the Fomori can be in control of Arcadia, at least partially, when the Mountain King is reincarnated - Lady Eiluned doesn't protect Deep Giant and Snow Daughter from the other Sidhe, but from the Fomori. But perhaps in order to leave Arcadia, they must go through a Sidhe controlled part, and that is when Deep Giant hands himself over?
That doesn't leave a lot of time for the fae to be forced out of not only Arcadia but most of the Dreaming, before the Troll Revolt. So perhaps the Sidhe are already well out of Arcadia by then.