Google may penalise your website for one of two reasons – using manipulative methods to increase your site’s rankings or providing a poor experience to people who visit your site.

Manipulative methods fall into one of two categories – on-site or off-site. On-site refers to methods used within the technical set-up of your site. Off-site refers to methods relating to backlinks, which are the primary factor that Google use to determine the trust and authority of a site.

A penalty can either be a manual one or an algorthimic one. A manual penalty is where someone from within Google has manually reviewed your site and determined that it has breached one or more of their guidelines. An algorthimic penalty is where your site has tripped a filter/safeguard built into Google’s algorithm.

Details here