All applicants for naturalization have to take and pass examinations in civics, unless they have a USCIS approved N-648 medical waiver advising that they have a serious medical condition (such as dementia) that adversely affects learning and memory. Some applicants who meet the age and length of residency requirements are allowed to take the examination in their native language rather that English.
An applicant who does not pass on the first try is given an opportunity to come back a few weeks after the initial interview to repeat the test. Applicants who do not pass in two tries continue to be permanent residents and are allowed to reapply for naturalization if they wish to do so. (Of course, they still have to take and pass the civics test then or meet the medical exception if a new application is submitted.)
I always tell my clients to make certain they hear and understand the questions asked and not to be afraid to ask for a question to be repeated or explained if needed. I also remind them that it is common to be very nervous when going to the Immigration office and when taking tests and that it is okay to tell the officer if a few extra moments are needed to think about an answer. Of course, I also remind them that success favors those who are prepared, and that the process is much less intimidating when an applicant has studied, and if possible, discussed the interview process and preparation recommendations with an experienced immigration attorney prior to attending the interview.
There is a lot of information about the naturalization test, including study guides, on the Immigration Service's website, www.uscis.gov under the "Citizenship" heading. If this link works, it should go directly to the page with those resources: http://www.uscis.gov/portal/site/uscis/menuitem...