When a power source (eg. a battery, a generator etc.) is used to provide electrical power to a load, the system (power source, wiring, switches etc) are designed to carry a certain amount of power, which is dependent on the current in the circuit. (The “load” can be a lamp, motor, TV set, oven etc.)
Under a fault in the “load” or the wiring, the current drawn from the source can rise. If the current is too high, the source or wiring can catch fire.
An overload relay is used to watch the current passing through the circuit and disconnect the source to prevent damage.