There are two main causes to reset an iPad to factory settings. The first one is to prepare the iPad for a new owner and the second one is to overcome an issue with the iPad, which cannot be solved by anything other than resetting the iPad to its default settings. If you are planning to gift your iPad to a family member or sell it, you will need to reset the iPad.
Resetting your iPad will wipe the iPad clean, removing all the settings and data. This will return your iPad to the exact state to that when you had first opened the box. By wiping the data, you would also protect your personal information from getting into the hands of unauthorized users.
Resetting the iPad is also a troubleshooting tool. Many of the common issues with the iPad can be solved by deleting the problematic app and then downloading and installing it again or by just powering down the iPad and the restarting it. Some of the issues persist beyond these steps and will need resetting the iPad to get rid of the problem.
In any case, you will have to backup the iPad to iCloud before factory resetting the device. This can be done by opening the Settings app, choosing iCloud, which is located in the left side menu, tapping Backup from the iCloud settings, and then selecting Back Up Now.
After doing a backup, you are all set to delete all the content saved on the iPad to rest it back to default factory settings. If you had turned on Find My iPad, resetting the device will turn the feature off. If are giving the iPad to a friend, you have the Find My Friends feature that can help you share your location.
To reset the iPad, you will need to open the Settings app and locate and select General Settings. Scroll down to locate the Reset option. After selecting the option, you will be offered many options to reset the iPad.
If you are planning to give the iPad to a family member who plans to use the same Apple ID account, you can select the Reset All Settings option. Selecting this will leave data and reset the preferences.
If you are resetting the device if there are troubles connecting the device to internet, you will have to select Reset Network Settings and if you are planning to sell the device, you will need to choose Erase All Content and Settings. This will delete all data stored in your iPad including iTunes account information.