The pilot of VH-PHO was not familiar with procedures in the Tamworth Control Zone (CTR). He had obtained a clearance from the tower controller to enter the CTR at 3,000 ft and had been instructed to report at 5 NM. After reporting at this position, the pilot was instructed to maintain 3,000 ft and to join the circuit upwind for runway 12 Right. At this time, there were four aircraft in the circuit. The pilot of PHO was then asked by to report sighting an aircraft on the upwind leg one mile ahead. He reported that he had the traffic sighted and was instructed to follow that aircraft. A short time later, the controller observed PHO descending and tracking for a mid-downwind position. This action conflicted with VH-YTQ which was on the downwind leg. The pilot of YTQ reported manoeuvring to avoid PHO. In response to aquery from the controller, the pilot of PHO reported that he was below 2,500 ft. The pilot of PHO did not fully understand the procedure for upwind circuit entry. Further, he believed that the instruction to follow YTQ meant that he was cleared to descend from 3,000 ft. The pilot indicated that he operated inside controlled airspace infrequently. Investigation revealed that the relevant publications do not include a definition for the term 'follow'. SAFETY ACTION As a result of this occurrence, the Bureau of Air Safety Investigation is investigating a perceived safety deficiency relating to the use of "sight and follow" procedures by air traffic controllers. Any safety output issued as a result of this analysis will be published in the Bureau's Quarterly Safety Deficiency Report.