Let me explain. The alternating current that comes to your house from a supplier consists of two wires. One wire is connected to ground at the supplier-end and this wire is called neutral. The other wire is called “live” and it actually goes 150v higher than ground then 150v lower than ground at a rate of 60 times per second. If you touch the neutral wire, nothing will happen. You will not get a shock. But if you touch the live wire you will get a tingle.
Now we come to a toaster.
The heating element inside the toaster is insulated (isolated) from the metal case at both ends and if the metal case is not connected to any other wire, you will not get a tingle if you touch it.
But suppose a paper clip falls into the toaster and it touches the element where the neutral wire is connected. Again, if you touch the case you will not get a tingle. But if the paper clip touches the live wire and the case, you will get a tingle.
If we connect the case to a wire that goes to the ground or earth, when the paper clip touches the active wire and case, the 150v positive/negative will cause a current to flow and if this current is large enough, it will trip the circuit breaker or blow the fuse.
Both the neutral and earth wires are at zero potential and you would think you could simply connect the neutral to the case. But if we did this, we would have a problem.
Suppose someone wired the toaster so that the neutral and active were reversed.
Anyone touching the outside of the toaster and also touching a metal item such as the sink, would get a tingle, even though the toaster did not have a “fault.”
That’s why the earth is a separate wire and in most houses it is generated at the front of the house – such as connecting to a water pipe or a pipe buried in the ground. It does not come from the street.
This is mainly done because the neutral wire develops a voltage when long runs are encountered and high currents are flowing.
Earthing at the house just pulls everything to absolute zero volts.