Re: grounding versus neutral
It is always wise to take great care with the word "ground." It is almost certain to be interpreted differently by the speaker of that word and the person who hears it. In fact, it is best never to use the word "ground" by itself.
There are two contexts in which that word comes up. Both have been mentioned above, in the other replies.
One context has to do with providing a path for fault current to return to the source. The purpose of creating that path is to permit the fault to have lots and lots of current. We want a high current because we know that that will trip the circuit breaker (or blow the fuse), thereby terminating the event. The correct, full, precise term for the wire that does this job is the "Equipment Grounding Conductor" (EGC). More common, but potentially confusing slang terms for this wire are the "ground wire" or the "grounding wire."
In addition, metal parts of electrical equipment (e.g., enclosures and conduit) are connected to each other, as part of the process of creating a path for fault current. The connections are made with "bonding wires" or "bonding jumpers," and the components are said to be "bonded" to each other.
The other context has to do with connecting a specific portion of the electrical system to planet Earth. In some other countries, England being one, this concept is not called "grounding," but rather is called "earthing." At the main panel in any building, the neutral wires are all connected to each other and to all of the EGCs. This connection takes place at the main panel, and at no other place. From this same point, a wire runs to one or more "grounding electrodes," a term that means a metal object in direct and firm contact with the dirt beneath or surrounding the building. The wire that goes from the main panel to the grounding electrodes is called the "grounding electrode conductor."
The most commonly used grounding electrodes are the building's steel frame (if it has a steel frame), the incoming water pipes (if they are metal and not PVC), and ground rods. The purposes of this connection to planet Earth are a subject of some debate. It is commonly said that it serves to create a common reference point for all voltages throughout the building, and that it serves to give a potential lighting strike an low-impedance path into the planet. Let's just stick with those reasons.
One final note: The neutral is more accurately called the "grounded" conductor. That is because it is connected to the "ground" (i.e., planet Earth) at the main panel.
