Here is something I found:
Why grounding is so important ?
Earthing of electrical systems is required for a number of reasons, principally to ensure the safety of people near the system and to prevent damage to the system itself in the event of a fault. The function of the protective conductor, or earth, is to provide a low resistance path for fault current so that the circuit protective devices operate rapidly to disconnect the supply.
The NEC, National Electrical Code defines a ground as: "a conducting connection, whether intentional or accidental between an electrical circuit or equipment and the earth, or to some conducting body that serves in place of the earth." When talking about grounding it is actually two different subjects, earth grounding and equipment grounding. Earth grounding is an intentional connection from a circuit conductor usually the neutral to a ground electrode placed in the earth. Equipment grounding is to ensure that operating equipment within a structure is properly grounded. These two grounding systems are required to be kept separate except for a connection between the two systems to prevent differences in potential from a possible flashover from a lightning strike. The purpose of a ground besides the protection of people plants and equipment is to provide a safe path for the dissipation of Fault Currents, Lightning Strikes, Static Discharges, EMI and RFI signals and Interference.
Improper grounding can create a lethal hazard. Correct grounding is essential for correct operation nad safety of electrical equipments. Grounding can solve many problems, but it can also cause new ones. One of the most common problem is called "ground loop".
-Scott
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