http://www.vermontdancesport.com/Etiquette.html

Wordy, but heartfelt and thoughtful
Asking Someone to Dance
In a social dance situation it is appropriate to dance with a variety of people. It is generally less acceptable to partner up and dance with the same person all evening long. Naturally some people will prefer certain partners to others, but this should not prevent them from asking or accepting an offer to dance with a new person.
Who to Ask
Anyone can ask anyone else to dance. Leaders ask followers, followers ask leaders, experienced dancers ask beginners, beginners ask experienced dancers… you get the idea. If you end up sitting out more dances than you’d like it’s probably because you haven’t asked. Some people can find it challenging at first but pushing through the initial fear is so worth it! In a very short time you’ll become very good at asking which means you’ll dance more and have a great time!
Note: People have a tendency to dance more with people they already know; it’s easier and it reduces their fear of rejection. It doesn’t necessarily mean they’re clique-ish, stuck-up, or that they don’t want to dance with you; often it means they’re a little shy or stuck in a rut. Remember – asking someone to dance is paying them a compliment.
How to Ask
"Would you like to dance?" is perfect, but anything similar is fine. When asking someone to dance, make eye contact, extend your hand invitingly, and ask in a clear voice. Be specific - always ask one particular person to dance. Do not go up to 2 people standing together and ask, "Would either of you care to dance?" The result will be that each of them will hesitate and defer politely to the other, but you'll experience it as rejection. If you partner says yes, extend your hand to them and lead (or follow) them onto the dance floor.
How many songs in a row?
Dance one song with someone, and then change partners. Two in a row is also fine, but more than that isn’t appropriate social dance behavior. Besides, the more people you dance with the better dancer you’ll become – and the more you’ll be asked!
Accepting a Dance (or not)
Say Yes!
If someone asks you to dance, it’s nearly always appropriate to say yes. In a social dance environment it’s expected that you’ll dance with a variety of people and to say “yes” when someone asks you. And remember – every time you agree to dance with someone else you help foster a friendly thriving dance community!
That said, social dances are not endurance events where you must dance until you drop. Nor must you dance if you are only interested in watching the other dancers. It’s important to take care of yourself and dance as much or as little as is appropriate for you.
Say No... (if you must)
There are several good reasons for saying no when asked to dance. It’s absolutely correct and appropriate to say no if you are physically exhausted, if you need to get water or use the restroom, if you are injured, or if you’ve already promised that dance to someone else. If you decline someone for one of these reasons you can seek that person out later and ask him/her to dance.
However, keep in mind that if you do turn someone down it's considered very rude to then accept an invitation to dance from someone else while that same song is playing. Not only is this poor dance etiquette, it is inconsiderate and cruel and will dampen the evening for the rejected partner.
It is never acceptable to say “no” because you don't think the partner is good enough for you, or because you are hoping someone “better” will ask you. In order for social dancing to be a fun and joyous activity dancers must be supportive of and kind to each other at all skill levels.
If anyone has a history of invading your personal space, dancing too forcefully, causing you pain, or monopolizing your time, you are not obligated to accept an invitation to dance with him / her. Etiquette strongly supports you in saying no if the person is dangerous, offensive or abusive (physically or verbally).
How to Say No
If you do say no, etiquette explicitly says that you do not have to give reasons. It is kind, however, to say something like "No thank you, not just now; perhaps later". Add a smile to mitigate the blow.
Saying Thank You
Everyone likes to be appreciated so don't forget to smile and thank your dance partner for a nice dance – after every dance. Technically speaking, the person who asked the other to dance should thank his or her partner for the pleasure – but it’s completely appropriate for the asked party to say "thank you," or "that was fun" or something similarly appreciative.
In addition, good manners indicates that the leader should always escort the follower off the floor. Never leave your partner standing in the middle of the floor alone.