Okay. The main reason is accumulated years of frustration with Croatian Football Federation, which is very corrupt organization. Most prominent figures in Croatian football are shady characters, and there is one person that personifies everything that is wrong, the big boss of Croatian football: Zdravko Mamić. He is the real boss of Dinamo Zagreb, Croatian champion of the last 15 or so years, although his function in the club (which is actually not a club, but a ‘public union’, which is off course just a clever way to avoid laws and taxes) is something like a ‘executive vice president’. He is the real boss of the Croatian Football Federation, although he is not the president. The president of CFF is famous ex player Davor Šuker, who’s activity outside the field is also very shady. Šuker is chosen because he is a famous name and has good connections in the international football, but he seems to be taking direct orders from Mamić and shows complete lack od interest in domestic football. Last year when CFF was in the biggest crisis since it begging (arrests, law suits, public protests), Šuker was on some irrelevant trip in Asia and gave no statement on the events. Mamić is also the real manager of most of the players who play for national team, although the owner of the agency that represents the players on the paper is not him, but his son. You got the picture.
People are frustrated because they are feeling more and more that they are not rooting for their national team, but for the private business of one man (and his family and friends). Situation was like that already in club football for years. Dinamo Zagreb is champion every year and every year they celebrate the title in front of few hundreds of people. Dinamo’s stadium is embarrassingly the emptiest stadium in the games of the Champions League. People were still supporting the national team, but the frustration was being felt even on the prior tournaments, and finally the drop that spilled the cup was when Mamić, despite the fact that the public was strongly against it, put Ante Čačić for the selector of national team, a guy who has no pedigree for such function, and was prior to that working for Lokomotiva club, which is actually just a Dinamo B.
While Croatia is playing games on the Euro, Mamić is having a trial for charges against corruption. He was brought before the court for various charges already before, most famously when Eduardo da Silva accused him for slavery kind of contract. Eduardo was minor (around 15 years old), poor and in the foreign country when he signed the contract which guaranteed Mamić a percentage of all the Eduardo’s future transfers and earnings. Which is something Mamić practice with all players he represents, which like I said is the majority of best Croatian players. On the Eduardo’s trial Luka Modrić (then already player for Real Madrid) even gave testimony as a witness against Mamić, but somehow everything was swept under the rug (or settled outside the court). The fact that no player - except Eduardo and one of our best defenders Lovren, who is not on the team because he got in the conflict with the selector, who off course cannot represent any kind of authority to our big-name players - shows any kind of resistance against this kind of grotesque and abnormal situation in federation and national team is making people frustrated with them too, and it makes them part of the system (many of them probably feel they do and de facto do own Mamić something).
There is also part of the story which is connected, north vs south (which is maybe similar to situation in Belgium) and the fact that our other most famous club, Hajduk Split, which unlike Dinamo still has huge following, is weaker and less successful every year, while Dinamo has seemingly limitless budget despite the fact that it has no audience.
Many people are still watching the games and supporting the team - it is hard to ignore that national euphoria, and many people simple watch just the big tournaments and don’t follow happenings in football that much - but the talk about boycott is everywhere, especially in the South, and especially among people who take football more to the heart.