It was in decline, and wasn't really a huge power either. The Brazilian gold rush, which had been the dominant economic activity in Brazil, was over and most of the gold ended up in Britain due to a terrible trade agreement (the Methuen Treaty). The flight of the Royal Family and elevation of Brazil to a Kingdom of equal rank with Portugal (and Algarve. For some reason) has already been mentioned, but there is some more to be said.

In 1808, as a consequence of continued Portuguese refusal to accept Napoleon's Continental System (which would be terrible due to extensive trading relations with Britain), Portugal was invaded by the Grande Armée. This is what led to the aforementioned flight of the Portuguese court, as it could not resist a offensive from one of Europe's greatest armies. Portugal was then occupied for many years, until it was liberated with British help. I hear the occupation was very harsh and the people really resented the neglect from Rio de Janeiro (of course they did), leading to a uprising in Porto in 1820, which forced the return of the Royal Family to Lisbon.

It was a good time for Brazil, since it stopped being a colony and was greatly developed. But for Portugal? Terrible. And, politically, the colonial status of Brazil would never be restored. Attempts reestablish control over Brazil backfired and led to the Brazilian declaration of independence in 1822.