Typically, it’s done in stages, with exaggerated signals.

Whichever person is the “active” initiator can take a step by touching publicly open locations, which are places on the body that are generally considered available for touch by strangers to get their attention. In other words, shoulders and upper back

The receiving dancer then has the choice to rebuff by stepping back or otherwise indicating a no, and the initiator should stay at a distance

From there, the active party can move to dance specific open locations, like the lower back, very top of the hip, or around the back of the neck (depending on the type of dancing). Again, the receiving dancer can indicate disapproval and that should be respected.

From there, the two people will move closer together if there is going to be a sexualized component to the dance, with the likelihood of being so close that words can be detected via being spoken right into the ear. And/or, a pass can be made by either via a kiss, or hands moving to nonpublic locations on the body like partially onto the glutes, pectoral (when the receiving dancer is male), ribs under the arm and close to the breast (but not the actual breast, which should be reserved for after verbal confirmation of intent to become sexual, or when non verbal actions such as kissing give a high probability that such contact is acceptable/desired.

Now, it is also possible for the receiving dancer to become the initiator, especially with more assertive dancing styles where there’s a lot of body contact in the groin or gluteal regions. In other words, someone switching from dancing to grinding is usually a sign that things are going to become sexual eventually. But if there’s no switch in dancing style, you can’t assume. If the dance starts out with grinding, twerking, or other high contact dancing, they may well only be offering dance, so proceed carefully.

Nothing is ever guaranteed. Always be watching for withdrawal of consent and respect it, verbal or non verbal.

Also, that’s all generally true regardless of sex/gender. A lot of that was picked up via working at bars and clubs, which included gay and drag venues. When the music gets loud, people revert to bigger signals, and it really doesn’t matter what kind of genitals they have, or how they present gender. It really becomes about being an initiator, or a receiver of contact levels. Those roles aren’t static though! Initiator and receiver roles may switch multiple times during a single song, and over a night of dancing, it’s roles will switch since even the most passive receiver is going to make the decision whether or not things will turn sexual, and likely begin giving those signals.

It’s also the case that when both people are looking for sexual contact to begin with, there will be two initiators mutually escalating signals until there’s a possibility of juices on the floor. Literally, not figuratively. Some people will fuck on the dance floor.

Newcomers to club dancing can run into issues since they may not have an understanding of signals, and may not be aware that they can set boundaries freely without over reacting to what is generally considered an acceptable step towards sexual or a sexualized contact.