Difference between live and neutral wires In domestic electrical circuits, there are 3 wires - live, earth and neutral. What is the difference between the live and neutral wires?
As there is AC supply, it means that there are no fixed positive and negative terminals. Current rapidly switches direction. Does that not mean that both the live and neutral wires carry the same amount of current, alternatively? Why is the neutral wire called 'neutral'?
 A: Live, neutral,and earth, are labels that are used to convey some information on the use of each wire.
You are correct in thinking that in a typical two wire AC loop/circuit, both wires carry the same amount of current (amps). So, both wires could be considered live wires.
In a 3 wire circuit, the neutral wire is created when you have a power source that is center tapped (CT), thereby creating two loops that are 180 degrees out of phase with each other.  For example, when you have 220V center tapped, each loop is 120V with respect to the CT. If each loop has the same load (current), then the CT current is zero. Because of this, the CT wire is called neutral wire (even when it carries some current).
Because of safety concerns, the neutral wire is grounded at the mains panel, and the grounding wire is called earth because it is physically grounded to earth (via water pipes or metal rod). 
To sum up, a live wire carries the full load current, while a neutral wire carries some current, only when the loads are not balanced. 
A: The voltage on live and neutral varies depending on country and even within a country on the location. Neutral is not necessarily zero and assuming it is will likely get you electrocuted.
The general idea is that live supplies the voltage and neutral is the return wire.
In most installations the live is at the required voltage and the neutral line is connected to ground at some point (so zero volts relative to ground). But neutral is also connected to the live wire through the device being powered, so the voltage close to the device won't be zero if the device is on.
However, it is not uncommon in Europe for both live and neutral to carry a voltage relative to ground (for example, 130v), obviously with different phases giving approximately a 240v supply relative to each other. In this case, you may see a fuse on both the live and neutral wire and you will get a shock from both, even if no device is plugged-in or switched-on to complete the circuit. My own house is like this.
A: You can either understand the concept of the neutral wire mathematically or practically. Since I'm more of a practical guy,let's take a look at the bigger picture. There is no neutral wire coming from the generator nor in transmission systems. The neutral wire is only implemented at the distribution (4-wire systems) and reticulation (live and neutral.... And earth) end of the picture.
Why is this you may wonder. The reason is that at the generator and transmission level, the lines or conductors have near identical impedance (ideally identical) therefore, the voltage between each of the 3 lines are of the same magnitude but 120 degrees apart from each other in phase. At the distribution level, your loads are far from identical, in fact each time a consumer of electricity switches the light on, the entire impedance of the distribution network changes.
This means that without a neutral wire, the voltage accross each load and the voltage between phases would be different, which is not ideal for both the consumer and the electrical system as it results in an imbalance of the electrical distribution system. Loads with greater impedance would require a larger volt drop across them than loads with less impedance.
The effects of this can be devastating on equipment not designed to handle the changing of the supply voltage, not to mention, your lights would fluctuate between dim and the sun like a disco club. This is where the neutral wire comes into play. The neutral wire is connected at a common point to all three phases. Ideally at $0\,V$ e.g star configuration.
This ensures that if there is a difference between each phases load impedance, that the voltage is kept constant. Which is why you only have $220\,V$(RMS) and $110\,V$ (RMS) or other standard voltage levels. It's the electrical current that should always be made capable of fluctuating. With the neutral implemented, we get constant voltage accross any load(impedance) with varying current.
How does the neutral wire make this possible? Since the neutral wire is a potential between all three phases, each phase along with the neutral wire can form an independent circuit e.g your house, hence live and neutral. It is the role of the neutral wire to carry any current as a result of the imbalance in impedance of each of the phases loads. This results in the maintenance of a stable standard voltage rating. Remember that voltage is relative to another voltage level.
If $220\,V$ is high, neutral is on the other hand is low, which also means that, since there is this potential difference, an electrical circuit may be formed in the first place.
Now, to answer the question posed in this topic, the live wire that can be traced back all the way to the nearest transformer(s) whose phase wires can be traced back to the generator's stator winding all the way at the power station. Neutral is the wire tied at the low potential end between each phase, enabling the completion of a circuit and maintaining a stable voltage level.
Since the neutral wire completes and electrical circuit (in terms of alternating current) it carries the same current as the live or phase wire tracing back to the generator, however, it's potential to earth is nearly $0\,V$. The voltage between the phase wire to earth would be $220\,V$, so the phase wire would alternate current direction between maximum positive and maximum negative peaks of the AC cycle.
A: 
What is the difference between the live and neutral wires?

The Life wire has a voltage (220V effective, in EU ) whereas the neutral is zero volts, at least in theory (unbalanced circuits could see some voltage on neutral, but that's undesired)

Does that not mean that both the live and neutral wires carry the same amount of current, alternatively?

Correct, when switched on. But then the "alternatively" is only misleading here. If you mean alternative current as in AC/DC, then yes. Of you mean some time on live wire, then on neutral, then no.

Why is the neutral wire called 'neutral'?

This is in the context of a star circuit (Y) which is a three-phase circuit and all the consumers are considered in theory balanced so that the neutral will carry the sum of all three phases and that is 0 volts.
A: 
What is the difference between the live and neutral wires?

LIVE WIRE
The live wire is connected directly to the generators of the electricity supply company.It carries current at high voltages (about $220-230\,\mathrm{V}$).
NEUTRAL WIRE
The neutral wire returns the electricity to the generator after it has passed through the appliance.The neutral wire completes the circuit.The neutral wire is at approximately $0\,\mathrm{V}$ but to be safe you must NEVER touch this wire either. If the wiring is faulty it may be carrying the same electricity as the live wire.

Does that not mean that both the live and neutral wires carry the same amount of current, alternatively?

Yes,they do. As I have mentioned above. The live wire carries the current towards domestic appliances and others instruments and the neutral wire emerges from the appliance and carries the current back to source.

Why is the neutral wire called 'neutral'?

Basically it is so called as it is at $0\,\mathrm{V}$. Nothing else.
A: The neutral is always at zero potential and it is taken as a reference. It is from this reference we mark the voltage at live wire. In short keeping the neutral always at 0, the potential at live wire varies. 
Now, the earth wire is another neutral at zero potential. It is nothing but a wire connected to earth on safety lines.
A: The live wire oscillates and either drains or supplies electricity to the neutral wire.
The live wire oscillates between 230V to -230V and the neutral wire always stays 0V.
A: Live: 220 V
Neutral and earth: zero.
