The word peloton means "flying ball" in French.The peloton in any bike race is the main body of riders. In the Tour de France, which is one of the most prestigious bike races in the world, the peloton may encompass as many as 200 riders depending on the field. The word can also refer to the global body of professional cyclists in general. The peloton may separate into two or more groups, though this usually only happens on climbs.
The peloton is basically formed to counter wind resistance. The riders at the front of the pack are breaking the wind for the riders behind, making it considerably easier for them to ride. After a short time, the leading riders will fall into a chain to save their energy. Riders take turns at the front, though team leaders rarely appear there.
It is better to be riding near the front of the peloton than to be toward the rear of the pack. This may seem counterintuitive, but it is about control. Speed changes near the front are magnified the farther back in the peloton you go.
Riders with high aspirations for the race or the individual stage will also tend to stay towards the front. They will have better visibility and will be better able to react to attacks or problems.
If a rider falls while in the peloton, they are likely going to take a number of other cyclists down with them. Dozens of riders may fall. This is another reason why the best riders stay near the front.