Answer a fool according to his folly, lest he be wise in his own conceit. -Proverbs 26:5, KJV
This is a fairly easy verse to understand: tell someone when they are doing something wrong, otherwise they may think they have it all figured out and are doing nothing wrong.
I could stop there, but perhaps some examples could help.
Children need to be told what is right and wrong, or they grow up thinking everything they do is okay and even good, if they survive! (My parents told me not to run I to the street, for example.)
A gossip will continue spreading lies and mistruths unless they are confronted and corrected.
Most importantly, people are on their way to Hell, thinking they are okay or even right in their beliefs, unless the Gospel is shared with them.
There are times to know when to stop and “shake the dust off your feet,” as mentioned in the previous verse or by Jesus Himself (Matthew 10, Luke 9, Mark 6). That is for another post!