Following servers and being followed as a server ensure visibility of your videos on other instances, and visibility of their videos on your instance. Both are important concepts of PeerTube as they allow instances and their users to interact.
Following an instance will display videos of that instance on your pages (i.e. “Trending”, “Recently Added”, etc.) and your users will be able to interact with them. https://docs.joinpeertube.org/lang/en/docs/install.html#git-stable
You can add an instance to follow and remove instances you follow in
Administration > Manage Follows > Follow, and add hostnames of the instances you want to follow there.
Being followed will display videos of your instance on your followers’ pages, and their users will be able to interact with your videos.
You cannot yet refuse a follow as it is automatically accepted, but you can block the instance a posteriori.