Connecting the live wire to earth is dangerous. The earth wire is at 0 V and has a very low resistance, so there is almost nothing to limit the current. With a p.d. of about 230 V across such a low resistance, a very large current flows.
A very large current heats the wires strongly. They can overheat, melt their insulation and cause a fire. A fuse or circuit breaker in the live wire will cut off the supply, but only after the current has already risen sharply.
The same fault is a danger to people. If the live wire touches a metal case that is not connected to earth, the case is live. A person touching it gives the current a path through the body to the ground, and they can receive a fatal electric shock. With a working earth wire, the large current flows through the earth wire instead and the fuse melts.
