The short answer is that you use "tiu" when a noun appears in the sentence. Ĉu tio estas maŝino? Jes, tiu objekto estas maŝino.

(Tiu is also used to refer to people without a noun, and occasionally when there is a noun obviously understood from context.)

Thus "tiu" is which, who, or sometimes which one. Tio is the more generic what. (But in English we tend to say "what" when we should say which, making this explanation more difficult than it should be for us!)