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Rare animal breeding

I often read about rare breeds that have managed to breed successful. In order for the species to repopulate there presumably needs to be a mixture of male and female offspring. Also those offspring siblings need to breed with each other. Is that a natural thing that happens in the wild.? Does interbreeding cause complications in other species as it does in humans?
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Dog lines which have been "closely bred" is the reason some dog breeds have the weakenesses they possess.

Wider breeding and even making new crosses (like adding poodles + <whatever>) helps reinvigorate a breed / make a new, hopefully healthier breed.