I guess it depends on the metaphysics of your world. In many books, magic and technology are enemies. In many others, they work together. I'm assuming arcane magic all along, here. If the Gods don't want an industrial revolution to occur, then it won't.
Monte Cook's Ptolus game seems to have a great way of dealing with it: magic is an expression of Law, so magic and machinery get along just peachy. Technology is controlled by the fact that, socially and politically, things are falling apart. The tech level is actually falling as skilled craftsmen get fewer and people forget how to make the wonderful devices of the ancients.
Could magic stop an industrial revolution? I think so, very handily, but with one major caveat: the magic users have to recognize what's happening early enough. The Revolution was already brewing in several places, but once the rising number and quality of inovations (along with things that allow those innovations to take place, such as increased literacy) reaches a certain critical mass then it might be too late.
Remember that the big advantage technology has is that anyone can use it. Magic is almost always either very hard to learn, limited to certain people, or both. Wizards will be outnumbered by the technologists, but magic can do a lot that technology cannot do.
If they recognize it (and they may, through prophecy and divinations - a major advantage that magic has), then it might be easy. various mind control magics, Domination, Suggestion.. all those could persuade Little Hans, who will one day grow up to produce the first workable steam engine, to stay on the farm and never leave it. Or, his village simply gets hit by a plague and everyone dies. Stuff like that.
Hardy's Oath of Empire series has a remarkable way of keeping magic going while stifling technology. Go read it.
I think if any race would try to stop it, it would be the elves if they behave like most people have them behave. Druids will, as well. Druids even hate farms, much less factories.
The environmental spoilage that comes with the baby steps of the industrial revolution (which we are still taking) is probably going to occur anyway. The people that CAN do things like Purify Water are too few and far between, and they can only affect so much water per day.
Wish and Miracle come into play, really, dependant on what the DM is willing to allow. If Wishes like 'I wish all the air over the kingdom of Konradia remained pure regardless of what the factories do' are valid, then the revolution will come, and come quickly. Even quicker if something like 'I Wish that I knew of a means to create a non-polluting factory' is valid.