I'm going from memory here and may be incorrect on some of the actual technical details. Any errors are mine and due to hazy memory.
From what I read McLaren were insistent on as small an engine as possible, the so called 'size zero' engine demand which prompted the layout that Honda ran with for the first two years with Turbo and MGU-H in the V of the ICE. This caused packaging problems and prevented major changes to the size of the MGU-H which, according to the regulations, could supply an unlimited amount of power back into the engine, something Mercedes managed to great effect. Eventually, after two years of wailing and gnashing of teeth McLaren relented and allowed a larger engine and to design the car around this for the start of 2017. This then facilitated an almost complete change in layout, matching Mercedes and Ferrari in splitting the Turbocharger and Compressor with a shaft running up the middle of the V linking the two with a much larger MGU-H at the compressor end taking power from, and able to supply power to, the shaft connecting the turbocharger and compressor as opposed to a standard road car turbocharger and compressor arrangement where the shaft is measured in centimetres as they're often part of the same housing.
This is a good article on it all: https://www.motorsport.com/f1/news/t...oncept-864854/
Anyway, where McLaren f*cked up is believing what was essentially a brand new engine for the 2017 season would be reliable and powerful. It was basically at the start of it's development cycle whereas Mercedes, Ferrari and Renault had anything from 3 to 5 years of development time to ascertain the optimal setup, fine tune it and make it powerful and reliable. All without being publically criticised by Eric 'Teflon' Boullier and an angry Spaniard on international TV every two weeks.
Honda came in a year earlier than planned, were handicapped by McLaren's demands and the ridiculous and ill-thought out 'Token' system limiting upgrades throughout the 2015 season meant Honda were permanently on the back foot until at least the arse end of 2016. McLaren expected too much, and now, I suspect, they'll watch the Red Bull AND the Toro Rosso beat them with the engine they used to have. And be £100m down a season for the privilege.
I was a huge McLaren fan, still am to a certain extent, but their demise has pained me greatly recently. They need fundamental change, a full root and branch cull and re-energisation from new staff, but I can't see it happening while the board and owners are too pally and cushy with those on charge of the racing team.