I imagine that the battle usually was decided by other means, but what happened when the two pike components met? How was the fight decided at that point?
And when did the soldiers, in the back parts of a Tercio for example, know that the battle is lost / when to retreat, since the Tercio seems like an awfully large formation, where the back just keeps on pushing without knowing the whole situation on the front.
Well it depends on the formation. Generallly, it seems that the fight was decided by hand to hand combat. Pikemen on the front might 'fence' for a while, but swordsmen, dopplesoldners, halberdiers and other 'melee fighters' would often be deployed at this stage, to break the pike formations' pikemen, who would either continue pike fencing or draw swords, at which point it'd become a morass of struggling men, with the addition of 12 foot poles everywhere.
The soldiers in a Tercio's rear would probably see what was happening. While on paper Tercios had upwards of 1,000 men, on the field they were usually deployed with around 500 men or so. They'd also move EXTREMELY slowly (Party because their hackbusiers/musketeers fired on the move) so the pushing wasn't as extreme as one might think.
A reply to /u/Obimaan
Re-post from a prior question.
The answer is that different elements of a tercio -- which itself is an organizational term, not a battle formation -- will move relative to each other depending on the threat.
Here is a great illustration of how elements of a pike&shot formation adjust to a threat from its right. In this case, they maximized the frontage of missile troops to pour fire onto an incoming enemy.
And to quote Lopez, Ignacio (2012-07-24). The Spanish Tercios 1536-1704 (Men-at-Arms) (Kindle Locations 772-774). Osprey Publishing. Kindle Edition.
At the approach of the enemy, the detachments of shot fell back and sought refuge within the squadron, and this was the moment for the pikemen to go into action. The posture they adopted depended upon whether they were facing cavalry or other pikemen.
Further to quote F. G. de Leon, The Road to Rocroi: Class, Culture and Command in the Spanish Army of Flanders, Brill (2009), it was the Sergeant Major who was central to "almost all of the army's decisions," as he was responsible to train the soldiers in various formations and maneuvers, and in battle he was the one to receive orders from the Maestre de Campo or Colonel, and send them to company Sergeants who lead their companies in battle.
So basically, the "perfect rectangles and squares" that you see in many illustrations were not completely fixed in battle. If you consider later periods into the mid 1700s, pikes started to play a strictly secondary role to muskets, as seen here, an excellent cross-section showing the interaction between pikes and muskets. Further, it is possible to combine the pikes into one massive grouping when it is facing another pike-heavy formation or cavalry.
The battlefield of the 16th century was a highly confused mass, there is no general answer to "what does xx soldier know about what's going on." It really depends on the leadership of the captains and their sergeants. The sound of the drums and other instruments were key in command and control.
A push of pikes do not always end up in a massacre, although if both sides did persist, the result is very bloody. At Pavia in 1525, the Swiss pikes made a steady advance against the Spanish Imperial troops, taking casualties from Spanish shot troops yet making contact against Spanish pikes, but the Swiss didn't press on and both sides disengaged.
