Consider a group $\{G,\circ\}$, with elements $e,g_1,g_2,...$, represented by the matrices $\{D(e), D(g_1), D(g_2)...\}$. If all the matrices can be brought to block diagonal forms by a similarity transformation, such a representation is reducible.
In this block-diagonalized form, any vector on which the representative matrices act, do not mix all components of the vector. So we conclude that there exists more than one nontrivial (except the null space and whole space) invariant subspaces.
I cannot fully understand the importance of this. Irreps are not always block-diagonal to start with. But can be made block-diagonal. If they are not block-diagonal, they would mix all components of a vector. Is this not a problem?
Let me give a simple example. The 2-dimensional representation of SO(2): $$D=\begin{pmatrix}\cos\theta & -\sin\theta\\ \sin\theta & \cos\theta\end{pmatrix}$$ is reducible to $$D\to D^\prime= SDS^{-1}=\begin{pmatrix}e^{i\theta} & 0\\ 0 & e^{-i\theta}\end{pmatrix}$$
In this first case, the basis vectors are $(1~0)^T$ and $(0~1)^T$. In this case, $A_x$ and $A_y$ mix with each other.
In the second case, the basis vectors are $2^{-1/2}(1~~i)^T$ and $2^{-1/2}(1-i)^T$ and S is given by $$S=2^{-1/2}\begin{pmatrix}1 & i\\ 1 & -i\end{pmatrix}.$$ It is easy to see that $A_{\pm}=A_x\pm iA_y$ do not mix with each other.
So if I am getting it correct, this example shows that there are two invariant 1-dimensional subspaces in this case - one spanned by $2^{-1/2}(1~~i)^T$ and the other by $2^{-1/2}(1-i)^T$. So finding irreps mean identify the basis?