The Fall of Magic only occurred in Erilea. Which includes, Terrasen, Adarlan, Eyllwe, The Deserted Land, The Red Desert and The Western Wastes. The Fall of Magic did NOT occur in Wendlyn or The Southern Continent.
The Fall of Magic was caused by The King of Adarlan. Since he had one Wyrdkey he made three towers and used his magic to block magic. One tower was built at Noll, one was build at Amaroth, and one was built in Rifthold.
In Heir of Fire, Chaol, Aedion, Ren Allsbrook, and Murtaugh Allsbrook work to piece together what led to the Fall of Magic. They discovered that the "waves" spread from different locations in Erilea formed a triangle across the continent. The first line went right from Rifthold to the Frozen Wastes. The second went down from the Frozen Wastes to the edge of the Deserted Peninsula. The third line went from there back to Rifthold. A spell, they believed, has been the cause of it.