Electrical polarity
Electrical polarity (positive and negative) is term use to describe the direction of current flow in an electrical circuit. Current flows from the positive pole to the negative pole. (electrons flows from negative to positive: http://amasci.com/amateur/elecdir.html, the difference in direction is due primarily to the discovery of electrical current before the discovery of the electron). In a direct current (DC) circuit, one pole is always negative, the other pole is always positive and the electrons flow in one direction only. In an alternating current (AC) circuit the two poles alternate between negative and positive and the direction of the electron flow reverses periodically.
Positive and negative
In DC circuits, the positive pole is usually marked red (or "+") and the negative pole is usually marked black (or "−"), but other color schemes are sometimes used in automotive and telecommunications systems. Polarity symbols are often used where DC is supplied via a coaxial power connector.
In cars
On a car battery, the positive pole usually has a larger diameter than the negative pole.
Modern cars have a "negative earth" electrical system. In this case the negative terminal of the battery is connected to the vehicle's chassis (the metallic body work) and the positive terminal provides the "live" wire to the various systems. However, some older cars were built with a "positive earth" electrical system, in this case the positive terminal of the battery is bonded to the chassis and the negative terminal for the live.
AC systems
In AC systems the two wires alternate polarity many times per second. In this context, "polarity" refers to the order in which the neutral and phase wires are connected. This is meaningful only with respect to ground potential. Reverse polarity could be dangerous.
In domestic mains wiring, the neutral is commonly earthed at substations and generators. There is one wire that is designated "hot" and colored black while the other wire is designated neutral, colored white, and is bonded to earth at the source. The power to the wires alternates in polarity and varies in potential from 0 - 170 volts (120 volts RMS) depending at which point in the generation cycle you analyze. At one point in time, the white wire will be at negative with reference to the black wire while 180° later in the cycle the opposite is true. There are two points in each cycle where the wires have no potential difference to each other as the alternation passes through the zero potential point while moving to reversal. The frequency of alternating current is 50 or 60 Hz, varying by country, meaning that this equipotential occurs 100 or 120 times per second, respectively.
In the US, national standards call for the hot side of the line to be a black wire, or in the case of 120-240 VAC, the second hot wire (2nd phase) is to be red. The neutral side of the line (transformer secondary center tap) is to be white. The neutral wire is required to be bonded to earth at the service entrance point of a building. This is primarily for the prevention of lightning injury to occupants and damage to the building from fire caused by a lightning strike on the incoming lines. There is also a ground conductor that must be run along with any circuit wires to provide for ground bonding of all metal housings on equipment and also for bonding outlet boxes to ground potential. That ground wire is never connected to the neutral line except at the main service entrance panel. It can be bare (or insulated if colored green) and can be either copper or aluminum. Along with augmenting the lightning strike protection, another important safety factor is provided by bonding this ground wire to any metal appliance housing. This makes it impossible for the metal housing to ever become live with reference to ground since it would constitute a short circuit and would trip the circuit breaker. This ground conductor will never carry any current under normal operation. Its primary purpose is to carry fault currents.