According to Clouds Orchids, an orchid retailer, orchids fall into two basic categories relevant to their potting needs. Most tropical orchids are epiphytes -- they grow high in the trees of the jungle, using the tree itself for support. The other type is terrestrial orchid, which grows on the ground. Terrestrial orchids have deeper, more extensive root systems than epiphytes, which don't require soil, just a potting medium.
Epiphytes prefer a shallow pot, as they have shallow roots. The pot should be less deep than it is wide. Terrestrial orchids need deep pots in which to develop a root system. An epiphytic orchid growing in a deep pot takes advantage of that extra room to develop its root system and will not spare any foliage or flower spike growth. Know which type of orchid you're growing to select the proper sized pot. Consult the American Orchid Society or have a local orchid grower identify your orchid before repotting.
The American Orchid Society advises letting the orchid's roots rather than its foliage guide the grower's pot selection. An orchid with rather substantial foliage may still have a small root system. While the plant may look top heavy once potted, you're doing the right thing in constricting the roots. However, an orchid whose roots are escaping the pot should probably have a slightly larger pot containing the roots.
The main goal when repotting an orchid is replacing the potting medium. Orchids need repotting when the growing medium breaks down. Because orchid growing media are usually composed of chunky material, such as bark, it's easy to tell just be looking when your orchid's medium is breaking down. If you find the roots are nicely tucked into the current pot, but the medium needs replacement, wash and reuse the pot. Wait to move up to a larger pot until the roots have begun to escape.