I am trying to give the answer in a methodical manner:-
(a) The concept of follow-on is applicable only in Test cricket or first-class cricket. It is not applicable in limited over cricket match.
(b) If the team which bats in the second inning of the match scores less than 200 runs than the score of the team which batted first, then the first team can ask the second team to follow-on. This means that if the first team scores 400 runs and the second team scores less than 200 runs, then the first team can ask the second team to follow-on.
(c) The follow-on is not compulsory. It is mandatory.
(d) If the follow-on is imposed, then the second team has to bat again. If even after the second inning of the second team (after follow-on), the aggregate does not surpass the runs score by the first team in the first inning, then the second team loses the game in inning. (Example: The first team scores 400 runs. Then second team scores 180 runs in its first inning. After following-on, it scores 190 runs in its second inning. In that case, the second team loses by an inning and 30 runs.)
(e) If the aggregate of runs of the second team surpasses the run scored by the first team in its first inning, then the first team bats again to try to score the remaining run to win the match.
(f) The ICC point system is not fully clear. Only this much can be stated that the team which wins the match gets more point.
(g) However, it must be noted that in case of a four-day match, the follow-on can be imposed if the difference is 150 runs (instead of 200 runs as mentioned earlier).
Beware! I question everything and everybody.