Ground fault interrupters are designed to protect from electrical shock by interrupting a circuit when there is a difference in the currents in the "hot" and neutral wires. Such a difference indicates that an abnormal diversion of current from the "hot" wire is occurring. Such a current might be flowing in the ground wire, such as a leakage current from a motor or from capacitors. More importantly, that current diversion may be occurring because a person has come into contact with the "hot" wire and is being shocked. When a circuit is functioning normally, all the return current from an appliance flows through the neutral wire, so the presence of a difference between "hot" and neutral currents represents a malfunction which in some circumstances could produce a dangerous or even lethal shock hazard.
GFI's are required by the electrical code for receptacles in bathrooms, kitchen receptacles, garages, basements, outside receptacles, and receptacles near swimming pools. The horror story scenarios which led to these code requirements are things like dropping a hair dryer or a portable radio into a bathtub with a person, causing electrocution. A typical circuit breaker interrupts the circuit at 20 amperes, but it takes only about 100 milliamperes to electrocute a person in such a scenario even less for children. The GFI is designed to detect currents of a few milliamperes and trip a breaker at the receptacle or at the breaker panel to remove the shock hazard.
The GFI has a "Test" button which causes a small difference between "hot" and neutral currents to test the device. There is also a reset button to use after it has been tripped.
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