Of course I am referring to your home's electrical system. An electrical circuit is a loop. The current travels through the hot wire in the main circuit panel to each outlet and returns through the neutral wire.
Since the early 1960's, the code has required circuits to be properly grounded. In basic home circuits, this adds a third wire, the ground wire. If any current is unable to complete it's circuit, the ground wire is there to ensure a return path. Near the power meter in every home, there is a 6 foot copper rod driven into the ground. Without proper grounding, your metal light fixture could become charged. If you touched it, you would receive a shock through your body from the stored charge.
All of the ground wires connect to the ground rod near the panel so any current that does not complete it's circuit is directed into the earth.
In the photo above, you can see the tip of the copper rod and the ground wires attached.
The basic definition is just what its name implies. By using the earth as a conductor of electricity, grounding ensures that metal devices, other conducting substances or, more importantly, people do not become the path for current to escape.