Question

what is the difference between Earth wire and neutral wire? Simple Explanation please! Ty

Answer 1

neutral= is return path for an AC circuit which is supposed to carry current in normal condition. This current may be because of many reasons, primarily because of phase current imbalance and some time because 3rd and 5th harmonic.
earth wire=This current is not directly coming from live or phase wire, but is from secondary links which was not in touch with live system in normal condition. This current is usually much lesser than main line current or phase current and mostly is in order of mA. But this leakage current is good enough to kill someone or may risk fire. Such current are being provided a low resistance path and sent to earth via earth wire.

Answer 2

In a household AC supply system independent of the country there are two wires required to supply single phase electricity.

These two wires connect to the two terminals of the generator, they will remain open at your end and you will connect a load between these wires that is when the circuit gets closed and current flows.

If it was as simple as that they would just be called as Terminal One and terminal Two.

However in reality the generator is far away and there are transformers in between and the voltages are stepped up transmitted and stepped down etc. If we were to use two wires for that distances it would be costly so we use earth (real earth, do not confuse this with earth wire in your house) as one wire from the generating station to your nearest transformer. The other wire is called as phase for reasons explained later in this answer. The voltage of the phase varies from minus 230V to plus 230V w.r.t the real earth (in India) at the output end of the transformer this is PHASE wire in your house. At the transformer near you a wire with the potential equal to earth is created and connected to your house this wire is called NEUTRAL. These two wires would be good enough for the devices to work.

Now coming to wiring in your house, it has one main switch that can cut off both PHASE and NEUTRAL. Other switches should be connected to the PHASE side and the neutral connected to the lamps/load/ sockets directly without a switch.