Are there any set of rules on when induction can or cannot be applied?

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I know this is some sort of "common-sense" question, but I want to get a clear boundary on this: when can I apply / cannot apply induction on a proof?

For example, I know that:

Ex1) A person with 1 hair is bald.

If a person has n hair and is bald, he is bald even when he has n+1 hair.

is a wrong application of induction.

Similarly, induction doesn't work on big-Os.

SO my question is, are there any "axiomatic idea" or anything that defines the boundary on when induction can be applied?

Thanks : )

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Induction works for all formal predicates on natural numbers.

It's ok that induction fails for the predicate bald(n) (where n is the number of hairs a person has) because notions like this are not formal, they are just rough classifications (not really the realm of mathematics).