The questions are:
What is the condition or circumstance that god take an incarnation of Earth?
And on what basis does he decide the place of his incarnation?
I would like to supplement the answer provided by (@iammilind) to this question at https://hinduism.stackexchange.com/a/20719/3869).
I agree to his statement that "Consider Dharma as an equilibrium and hence any auto adjustment or auto balance phenomena can be considered as manifestation of God."
I had already answered (https://hinduism.stackexchange.com/a/34975/3869) expressing my opinion that incarnation concept is Puranic but could not find place in Vedic Literature/Ramayana.
In order to bring equilibrium on the Earth, the God may inspire certain human beings for guiding/fighting for the sake of the fellow human beings.
These human beings, blessed with Divine nature, will inspire fellow human beings and achieve things which are apparently beyond the reach of ordinary humans.
Naturally, adoration towards them starts.
People like Sri Rama were human beings, endowed with DIVINE nature, which was the necessity at that point of time.
The popular belief is that Sri Shirdi Sai/Sri Swami Samarth, etc, exhibited supernatural powers and gave the darshan of Sri Rama/Panduranga, etc, and hence they are the incarnations of the God.
Yes, those saints did exhibit supernatural powers and gave the darshan of Sri Rama/Panduranga, etc, to some devotees.
Now, a question arises - whether those saints exhibited supernatural powers in front of everyone and gave the darshan of Sri Rama/Panduranga, etc, to every devotee?
The answer would be a big NO.
Those saints, with no EGO/desire left, lived in the ABSOLUTE BLISS (merged in the God), though moved in the midst of humans with different stages of maturity.
So each devotee got experiences according to one's stage of maturity.
As Sri Ramana Maharshi said many a time that Gunpowder catches fire in an instant, while it takes time to ignite coal.
So only a few devotees got those visions of God. Again, were those visions of the God real and have some value?
Those visions ONLY have the value of inspiring the devotees to strive further in the SPIRITUAL PATH, as those devotees after getting darsans of God, continue to lead mundane lives.
Further, those visions were occurred according to perception of the God of the devotees. Those saints did not show vision of Panduranga to everyone. Some got vision of Devi, some other had the vision of Dattatreya and few others got the visions of Sri Raama, etc.
We have a similar situation in Mahabharata, where Arjuna was told by Sri Krishna to see whatever he wants to see.
I had discussed the above issue at this answer (https://hinduism.stackexchange.com/a/34957/3869)