Ans. A short circuit occurs when a circuit with a very low resistance is formed. The low resistance causes the current to be very large. When applicances are connected in parallel, each additional appliance placed in circuit reduces the equivalent resistance in the circuit and increases the current through the wires. This additional current might produce enough thermal energy to melt the wiring's insulation, causing a short circuit.
Short circuit can also occur when the livewire and the neutral wires come in direct contact.
In order to avoid the situation of short circuit, the wires carrying electricity should never be naked. Rather it should be covered with a good insulator.