What is Fail-over
The goal of fail-over is to allow work that would normally be done by one server to be done by another server should the regular one fail.
For example, Server A responds to all requests unless it has a hardware failure, or someone trips over its network cable, or the data center it is located in burns to the ground. And if Server A cannot respond to requests, then Server B can take over.
Or if you simply need a service to be highly available, fail-over allows you to perform maintenance on individual servers (nodes) without taking your service off-line.
For fail-over server B would ideally be in a separate data center, or if that wasn't possible you would at least want to try and put it on a separate switch than Server A and on a separate power outlet as well. Basically the more physical separation the better.
BIG FAT NOTE: Failover is not the same as Load Balancing
What is Load balancing
Load balancing lets you spread load over multiple servers. You would want to do this if you were maxing out your CPU or disk IO or network capacity on a particular server.
Alternatives to load balancing include 'scaling' vertically. e.g. getting faster or better hardware such as quicker disks, a faster CPU or a fatter network pipe.
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