Question: How could a really intelligent species be kept from developing? For clarification, this species is the only creature of intelligent thought on the planet and they have a population of about 50 million across the planet about the size of the moon. However, they can't develop to the level that Britain reached in the industrial revolution.

Answer: 
No fossil fuels, no wood
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Without either fossil fuels or wood, any species is going to be hobbled in the fields of metallurgy and chemistry, as well most others. This goes double if there are very few lipids around.

Lack of wood also means that the most convenient building and carpentry material is unavailable.

Your civilisation will have nice baskets, and, if answers to other recent questions are true, jugs. And that's about all. Caves and wickerwork and jugs.
Have an existing spacefaring species from a different planet/solar system/whatever give opposing political factions nukes, tell them "the other guy" is going to kill them by the end of the day if they don't shoot first, and don't tell any of them how powerful the nukes are.

This will likely kill everyone on the moon and possibly destroy the moon itself. Even if there are survivors, they will be too few to recover any time in the next millennia and likely too radiation diseased to survive the next decade. And the flora and fauna will likely not able to sustain the survivors, so they probably won't even survive the year. And that's if they can find potable water. Maybe they survive a month, depending on how much food and clean water they have stocked in stores and homes.

So, no more development.