I'm not able to drop a transition between the clips in iMovie. Any reasons?

iMovie shouldn't be rejecting insertion of transitions. When iMovie behaves unexpectedly often it is because of a preference that has gone awry. Try deleting/resetting preferences and see if that cures it. To delete/reset preferences open iMovie while holding down the Option and Command keys and select to delete preferences in the box that appears. iMovie will open in a new library. Reopen your old library to get back to your projects. Now see if you can add a transition to the timeline. Possibly you may need to reboot to set the changes.  Deleting preferences is a safe procedure that will not cause data loss or disruption to your project.

If still no luck, possibly the problem is confined to just this one project. Try creating a new project and see if you can add transitions there.

The above should solve it. If not, out of curiosity, try control clicking on the clip and choosing to Add Cross-Dissolve from the pop-up menu. Do the same from the Edit menu. Will the cross-dissolve go in? Click on the Settings button above and to the right of the timeline and in the dialogue box that appears check the box that says Automatic Content. Do cross dissolve transitions appear throughout the project?

-- Rich

Normally one would drag the transition from the transitions pane and place it in the timeline between two clips. So, are you saying that you are not successful in doing that?

What procedure are you following to place the transition, and what specifically happens when you try?

-- Rich