What formatting rules does a YAML playbook file have to follow?

Save as .yml or .yaml; start the document with three dashes and optionally end it with three dots; indent with spaces only, never tabs; give siblings the same indentation and indent children further than their parent.

• Extension: .yml or .yaml.
• Document markers: the file begins with a line of three hyphens (the YAML document start) and may end with a line of three dots ....
• Spaces, not tabs: YAML forbids tab characters for indentation. A single tab is a syntax error, which is why editors for Ansible are set to insert spaces.
• Same level, same indentation: items of the same list, or keys of the same object, must line up exactly.
• Children further in: anything that belongs to an element must be indented more than that element. How many spaces is up to you (2 is common), as long as you are consistent.
• Blank lines are allowed anywhere for readability.

The reason indentation is so strict: YAML has no braces or brackets in this style. The indentation is the structure. Moving a line two spaces left can turn a module argument into a task keyword, and Ansible then complains about an unknown parameter or does something different.

Go deeper:

• YAML Syntax (official docs) — the YAML subset Ansible uses, plus common gotchas.
• What is YAML? (Red Hat) — short intro to indentation-based structure.