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A circuit is electrically grounded when charges are able to flow directly from the circuit into Earth in the event of a short circuit.

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You are probably thinking about what is called a 'chassis ground' or 'chassis earth'. Cars' electrical systems are examples chassis ground systems.

Using a car as an example, one terminal of the battery (usually the negative terminal) is connected directly to the metal body (the 'chassis') of the vehicle. The other terminal then supplies the various electrical loads in the car. An individual circuit consists of a single insulated cable running, via a switch, to, say, a headlamp; the return part of the circuit is then through the metal bodywork of the car. So the car's bodywork acts as the return conductor to the battery. Using a chassis earth dramatically reduces the number of conductors required by all the various loads within a car, as the chassis of the vehicle acts as the return conductor for each circuit.

A chassis ground may, or may not, be itself connected to the general mass of the earth itself. In the case of a car, the chassis earth is not connected to the earth itself.

In most other cases, ground or earth connections are made between the metal housing of an electrical appliance and the general mass of the earth itself. In the event of a line conductor accidentally making contact with the housing of an appliance, an earth fault is applied to that circuit, causing the fuse or circuit breaker supplying that circuit, to trip. In other words, the purpose of this type of earth connection is to protect against a shock hazard. The reason this sort of protection is necessary is because the supply transformer's neutral is grounded at the substation, and offers an alternative route for a fault current to return to the source.

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