Two colonies of Bacillus subtilis of identical strains growing adjacent to each other on an agar plate exhibit two distinct types of interactions: they either merge as they grow or demarcation occurs leading to formation of a line of demarcation at the colony fronts. The nature of this interaction depends on the agar concentration in the growth medium and the initial separation between the colonies. When the agar concentration was 0.67% or lower, the two sibling colonies were found to always merge. At 1% or higher concentrations, the colonies formed a demarcation line only when their initial separation was 20 mm or higher. Interactions of a colony with solid structures and liquid drops have indicated that biochemical factors rather than the presence of physical obstacles are responsible for the demarcation line formation. A reaction diffusion model has been formulated to predict if two sibling colonies will form a demarcation line under given agar concentration and initial separation. The model prediction agrees well with experimental findings and generates a dimensionless phase diagram containing merging and demarcation regimes. The phase diagram is in terms of a dimensionless initial separation, d[combining macron], and a dimensionless diffusion coefficient, D[combining macron], of the colonies. The phase boundary between the two interaction regimes can be described by a power law relation between d[combining macron] and D[combining macron].