Electric fields parallel to an ambient magnetic field in collisionless plasmas are most likely localized in double layers (DLs). Using one-dimensional Vlasov simulations, we study the localization processes for DLs in the return current region of the auroral plasma, in which the density decreases with increasing altitude. If there is a preexisting density cavity in the plasma, the DL forms in the cavity localizing the field-aligned (parallel) potential drop in it. If there is no preexisting cavity in the plasma, the cavities are created by plasma instabilities localizing the parallel fields in them. Performing several simulations by varying the length of the simulated plasma, depth of the density depletion in the initial cavities, and the magnitude of the large-scale density gradient, we learned that the DLs formed in the cavities and associated plasma response are highly dynamic. The dynamic response of a DL includes its (1) progressive motion into the lower-density plasma, (2) weakening or complete dissolution, and (3) reformation depending on the evolution of the electron current. The associated dynamic response of the plasma includes (1) evolving level of electron and ion accelerations, (2) double and counterstreaming of both electrons and ions, (3) generation of nonlinear wave structures like electron phase space holes (EHs), and (4) strong perturbations in the electron current caused by the EHs. The reformation of the DLs in the remains of old density depletions is associated with a cavitational instability, which has a threshold condition like that for the Buneman instability. When the evolving electron current exceeds the threshold, it triggers redeepening of the remnant depletions by the cavitational instability as well as the reformation and/or regrowth of a DL. The temporal plasma response associated with the decay, regrowth, and/or reformation of double layers greatly adds to the complexities of the plasma electrodynamics driven simply by a static and stationary DL. We suggest that many of the highly dynamic behaviors of the auroral return current plasma, as observed from FAST, could be the consequences of such temporal behavior of DLs.