Is a study circle very important for civil services preparation, or can it be prepared for with self-study in almost complete isolation?

Both approaches work.

A good study circle will help you assess your progress much better. However, it can be a recipe for disaster if the group consists of a bunch of wannabes who just want to waste time discussing non-issues. Don’t fall into that trap.

If you are confident of yourself and can assess your progress without the help of a third person, self study is the best option. It saves times and also helps you focus on your own time table.

I used a mix of both- I had a bunch of friends with whom I would occasionally discuss my progress, share study material with etc. However, most of the time, I would just study on my own, locked away in my room.