A Ground Fault Circuit Interrupter, (GFCI), sometimes called a Ground Fault Interrupter, (GFI) is an important electrical safety device in your home. GFCI's should be installed in Kitchens, Bathrooms, and any other room with a sink, like a Laundry area, as well as Garages, Exterior Outlets, and near Pools or Hot Tubs.
During the course of a home inspection, I check all GFCI's for functionality. About 5-10% of the time I find defective units that either do not trip or reset when tripped.
New construction typically has GFCI's in all applicable locations. The codes have changed over the years as far as placement, but if you have them in the locations listed above, you should be covered. GFCI's will provide a high level of safety in potentially wet areas, with a reasonably small cost, and in most cases they are fairly simple to install.
Within the GFCI there is sensitive circuitry designed to prevent electrical shocks. Any current imbalance between the hot (power) and neutral lines will cause the GFCI to trip immediately, thus cutting power to the circuit. The imbalance tells the GFCI that there is a possibility of current leakage which may result in an electrical shock.
GFCI's should not be confused with the circuit breakers, or fuses that are installed in your electrical panel. Circuit breakers and fuses protect your electrical wiring from overloading, overheating and burning. Fuses or Breakers limit the amperage that flows through the wiring. For example a 15 Amp breaker will trip if the load on the circuit exceeds 15 Amps.
You should check your GFCI's once a month using the "Test/Reset" buttons on the front of the outlet. Sometimes GFCI circuit breakers are installed in the electrical panel in place of the usual breaker. These will also have a "test" button on them. Keep in mind that only one GFCI needs to be on a circuit. For example, all outlets in a garage may be protected by a single GFCI at the beginning of that circuit. Occasionally all bathrooms will be connected to a common GFCI.