Every great heist film has a mastermind—the organizer who brings the team together and comes up with the plan. Watership Down is basically a series of heists (or, okay, adventures), and the mastermind here is Hazel. But Hazel doesn't just have to come up with the idea for the trick; he's also the leader who has to take care of his people when the trick goes horribly awry. And when his bunnies are in danger, Hazel always offers to sacrifice himself for them.
The first time we see Hazel, the narrator just comes out and says that Hazel can take care of himself. Here's how: "He looked as though he knew how to take care of himself" (1.4). That's pretty solid evidence… except for the little weasel words that make it less solid. That is, "He looked as though he knew"—that's not as solid as saying "He knew… " So notice that the narrator gives a little bit of description here and a little wiggle room. Yes, Hazel does look like he can take care of himself, especially compared to the other rabbits who look "harassed" (1.4).
But with that little wiggle room, the narrator sets it up so that Hazel can fail occasionally. Bunny ain't perfect. And he does fail, sometimes pretty badly. For instance, Hazel is successful at getting his team to Cowslip's warren; but he screws up by not listening to Fiver about the dangers of that Warren. (We can argue about whether it was a mistake of his not to kill Campion's patrol when they're escaping from Efrafan territory in chapter 40.)
Although Hazel should listen to Fiver all the time about everything, Hazel's most foolish actions seem to come from his sense of adventure and his desire to show-off. For instance, check out these two quotes about Hazel's mischief-making, adventure-seeking side:
Then his sense of adventure and mischief prompted him. He would go himself and bring back some news before they even knew that he had gone. That would give Bigwig something to bite on. (9.2)
A spirit of happy mischief entered into Hazel. […] He was confident and ready for adventure. But what adventure? Something worth telling to Holly and Silver on their return. Something to—well, not to diminish what they were going to do. No, of course not—but just to show them that their Chief Rabbit was up to anything that they were up to. (24.2)
Notice how when Hazel gets a little adventurous, his motivation isn't just "to have a good time" or "to not be bored." In many cases, his motivation is to show-off to some other rabbit. In the first case, he wants to explore in order to show Bigwig who's boss. In the second quote, well, it's the same thing: he wants to show Holly and Silver that he can do it. There's a name for that desire to show-off—it's called show-offiness. Or if you prefer, you could call it pride.
But Hazel isn't the worst rabbit when it comes to pride. (That award probably goes to the Threarah, who is very proud of winning it.) At the very least, Hazel is a leader who allows his followers to be free (unlike Woundwort) and is willing to listen to his followers (unlike the Threarah.)
In fact, we said that Hazel is the mastermind of this book and he does come up with a lot of good ideas. For instance, his plan to befriend a bird to find some nearby female rabbits works very well, though it might seem a bit kooky at first.
But a lot of what makes Hazel a truly good leader is that he's willing to listen to the other rabbits for good ideas. For instance, Hazel has a general plan about getting the does out of Efrafa—but it's Blackberry who comes up with the plan to use the boat as an escape. So one quality that makes Hazel a better leader is that he's not a bully who refuses to listen. He takes good ideas as they come, without caring much about where they come from.
At the end of the day, what really makes Hazel a Great Leader (check out those capital letters) is that he's willing to sacrifice himself if necessary to protect his team. We figure this out early on so that there's no mistake. In Chapter 5, Dandelion compares Hazel to El-ahrairah (who is like the George Washington of rabbits—every leader wants to be like him in some way) because Hazel is "[r]unning our risks for us" (5.10). So one tenth of the way through the book, we know what makes Hazel a great leader: he's willing to put himself in dangerous positions so that his followers don't have to.
We see this over and over again: Hazel refuses to leave Pipkin and Fiver when they can't swim (chapter 8); Hazel goes over to meet a strange rabbit, not knowing if it's a trap (chapter 12); Hazel goes back to rescue the spooked domesticated rabbits and he runs out to distract the humans (chapter 25); Hazel goes to speak to General Woundwort (chapter 43), etc. Sheesh, this guy has a real hero complex.
And all of that explains why our final image of Hazel isn't him ruling kindly over his followers. Our last image of him is when he dies peacefully near some young rabbits and feels "the extraordinary feeling that strength and speed were flowing inexhaustibly out of him into their sleek young bodies and healthy senses" (Epilogue.8). Throughout the book, Hazel has been willing to die to help his followers. This image—of his strength flowing into other rabbits—is a perfect symbol of that willingness to give his strength for others. Oh, man, now we've made ourselves cry.