Look here, even Mike H. is stuggling to clarify the issue;

By Mike Holt for EC&M Magazine

For over 25 years I have attempted to explain the requirements of the National Electrical Code (NEC) and I have found that the most difficult sections to explain are those that required the understanding of basic electrical principles. It appears to me that many in the electrical industry do not have a good working knowledge on the basics of current flow and the wiring methods of both the electric utility and premises systems.

I have found that the most difficult subject for people to understand is grounding as contained in the NEC for personnel protection, particularly the requirements for services, separately derived systems and separate buildings. This short article is not about grounding, but hopefully it will provide you with an overview of the electrical system from the Substation (69kV) to the load.

Point No. 1. Electrons leaving the power supply are always trying to return to the power supply, not the earth. What many fail to recognize is that the magnetic field from alternating current on the primary winding induces a voltage in the secondary conductors. This causes electrons to leave the power supply (secondary winding), travel through the load to perform a useful function, and then return to the power supply via the circuit conductors. Figure A

Point No. 2. The grounding of electrical systems for utility system is different than the requirements for premises wiring system.
Utility System Grounding - The electric utility, in accordance with the National Electric Safety Code, utilizes a 'multipoint grounded system.' This system purposefully grounds the utility neutral 4 times a mile and at every transformer or lightning protection device.

Because the utility neutral is grounded at many locations, it is in parallel with the earth. This assists in providing a low impedance path necessary to clear for a high voltage ground fault. In addition, the earth is used to stabilize the system voltage in the event the neutral is opened by equipment failure, such as a tree falling during a wind or ice storm.

Premises Wiring (Not Over 600V) Grounding - Wiring in a building must be installed in accordance with the National Electrical Code, which utilizes a 'single point ground system.' In this system, neutral current is intended to only flow on the 'grounded (neutral) conductor,' fault current is intended to flow on the 'effective fault-current path,' and the earth serves no purpose in clearing ground faults.

Author's Comment: The 'effective fault-current path' is an intentionally constructed, permanent, low-impedance path designed and intended to carry fault current from the point of a line-to-case fault on a wiring system to the grounded (neutral) at the electrical supply source. It is created when all electrically conductive materials that are likely to be energized are bonded together and to the grounded (neutral) at the electrical supply.

Grounding Summary: The utility system utilizes the earth and the multipoint grounded neutral conductor for the fault-current path, where as the premises wiring system uses an 'equipment grounding conductor' for this purpose. The earth is used by the utility system to help clear high voltage ground faults, but the earth does not assist in clearing ground-fault for systems not over 600V. Figure B

Please let me know how I can make this short one page article better, I am limited to 500 words (currently it has 525) and one graphic. But you might have an idea or comment that I should consider.