A short circuit can occur for a variety of reasons. When one happens, it should be attended quickly, as they can cause serious damage and danger. In normal operation, electricity source provides voltage to create a current through the wires in a circuit. In a short circuit, this flow is interrupted and acts differently.
As a rule, electricity will follow the path of least resistance. A short circuit is the result of a new path being formed that isn't intended. In most cases, if bare wires cross one another the flow is sent in a different direction and creates the short. The short will create a high flow, and can cause sparks or fire.
Keeping up on your breaker box will go a long way in preventing dangerous shorts. Also make sure that outlets in your home are inspected occasionally for damage. If you find damage to an outlet, stop using it immediately and contact an electrician to fix it. Also, make sure that any appliance that is plugged in is in good working order, with no fraying or split cords. When you are wiring a new project, make sure you take your time and follow all directions to prevent shorts from occurring later.