Short-circuiting : If the plastic insulation of the live wire and neutral wire gets torn, then the two wires come in contact either directly or via a conducting wire. This touching of the live wire and neutral wire is known as short -circuiting.
In this case, the resistance of the circuit becomes almost zero. This results in the flow of large current in the circuit. This heats up the wire dangerously and may lead to fire.
Overloading : The current flowing in domestic wiring at a particular time depends on the power ratings of the appliances being used. If too many electrical appliances of high power rating e.g., electric iron, water heater, air-conditioner, etc. are switched on at the same time, they draw an extremely large current from the circuit. This is called overloading.
Therefore the copper/aluminium wires of household wiring get heated to a very high temperature. This can lead to fire.