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For electricity to do useful work, it has to flow from a positive pole to a negative pole. (conventional current flow).

There has to be an electrical path between these two poles, provided by conducting wires and electrical components.

So the current flows from a source of electricity (say a battery), through the wires and components, then back to the same power sources other pole, in a circular fashion, completing the circle. Hence Circuit.

If a set of wires and components (say a lamp) completes this circle, such that when power is applied to the terminals, it works; then that set of wires and components is called a circuit.

If a stray wire connects straight across the power supply terminals, the power will take the least line of resistance and flow that way, instead of through the desired circuit.

This is then known as a short circuit. It takes the short path and does nothing useful, it takes as much current as possible, which ususally results in the wires overheating and catching fire.

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