The Origins of the Teutonic Knights
The Teutonic Knights started as a small hospital in Jerusalem for Germans visiting the Holy Land. It was called "The House of Saint Mary in Jerusalem." The Teutonic Knights became very wealthy thus they were able to pay mercenaries to go on crusades and convert heathens to Christianity. The Teutonic Knights were even recognized by Pope Celestine III in 1192. They fought in many wars for many popes and conquered many lands.
Martin Luther
Most historians attribute the downfall of the Knights to Martin Luther. Martin Luther was a German monk who broke away from the Catholic Church because he disagreed with what was written in the Bible and the rules of the Church. He thought it was wrong that the Pope would pray to shorten a man's stay in Purgatory for money, even though this was technically written in the Bible. Martin Luther also disagreed with the idea of Purgatory even though that it was written in the Bible. When he broke away from the Church, he even publicly denounced confessions which is ALSO written in the Bible.
The Fall of the Teutonic Knights
To join the Teutonic order, you had to keep a vow of chastity and not engage in fornication. This is one of the beliefs Martin Luther was against. His excuse would probably be "Be fruitful and multiply" but this just took time away from priests/preachers to do their job because they have a family to take care of. The Teutonic Knights were very fond of this idea because they could finally have a family, and many deserted or renounced their fealty to the Catholic Church. The order had to end because their only source of income now was the Catholic Church, and now that most of the Knights broke the rules of the Church, it was illogical for the Church to continue paying their enemies or a small group of soldiers who could easily be defeated on the battlefield.