Suppose a team,batting second, makes at least 200 less run than the first team. i.e. First team made 550 runs, second team could manage only 275, i.e. 2nd team is 275 runs behind the first team.
In this situation, captain of the first team MAY give the other team follow-on, i.e. bat again.
Now, how does a captain decides whether to give follow-on or not?
How's the other team's batting line-up playing against your bowlers? Does he think that his bowlers can bowl them out again with marginally less score?
Are his bowlers tired? Do they need rest?
How's pitch behaving? Is it helping helping batsmen now?
After considering above things, captain generally gives follow on.
1. Bowlers get very tried by bowling twice continuously.
2. In the history of test cricket, decision of following-on the other team, has backfired only thrice, all against Australia, twice by by England and once by India, Kolkata Test, 2001.