You use a higher iso in situations where you need the camera sensor to be more sensitive to light, because there isn't enough light to take the shots you want. For example, when shooting sports in-doors you need a fast shutter speed to capture the action without motion blur. However a fast shutter speed means less light getting to the sensor, even with the aperture wide open, and may mean your shots are too dark due to being under exposed. In this case you would increase the iso.
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