Step 1: Critical points
$f'(x)=0$ at $x=\pm2$.
Step 2: Test a point
At $x=1.5$: $f'=\frac12-\frac{2}{2.25}<0$, so $f$ is decreasing there.
Step 3: Test the options
Options (A) and (B) include values greater than $2$ where $f'>0$, and (C) includes $0$. Only (D) works.
Final Answer:
Option (D), $(1,2)$, is the interval of decrease.
\[ \boxed{\text{(D) }(1,2)} \]