The earth wire is for safety purposes....it takes away(grounds) the excess electricity released into the surrounding....and metal is conductive...the excess power flows into earth wire.....if the earth wire is not attached then it flows into ur body when u touch it...giving a small shock in MOST cases....pc case is a good example....if u dun ground ur casing...u'll definitely get a small shock.

The E wire also serve the function to trip off the power if any dangerous power leakage occurs. Its also connected to the ELCB(earth leak curcuit breaker). Its tht lil switch tht u have to flip back up when lightning passes by ur house. Once a device leaks power to a dangerous level...it will also "trip" off to prevent the user from being shocked or even fatality.