Metals
One atom, all by itself, consists of a heavy positive nucleus surrounded by a bunch of light negatively charged electrons. One type of atom holds on to its electrons more or less tightly than another type. Metals tend to hold on to their electrons pretty loosely. So when you put a bunch of metal atoms together the electrons can kind of float along from one atom to the next. No atom likes to be unbalanced, so if one atom gives up an electron it will take one from its neighbor, and so on down the chain. If there's an end to the chain and no extra electron is available, then no current will flow. But when you make a loop -- a circuit -- the electrons can move in a continuous circle.
Resistance
Every time an electron moves through a metal, there's a chance it will bump into something. In a wire there are many electrons moving at once, so there's a lot of bumping going on. The bumping is kind of like friction. When you rub your hands together, they heat up. When electrons bump into each other, they heat up, too. The amount of resistance -- the amount of "bumping" -- in a wire depends upon what material it's made of, its diameter and its length. A copper wire has a lower resistance than an iron one, but a gold wire has a lower resistance than one made of copper. The larger the diameter, the lower the resistance, but the longer the wire, the higher its resistance.
Power Dissipation
The amount of power dissipated in a wire depends upon its resistance, but it also depends upon the number of electrons flowing through. That is, a wire with a high resistance but only a few electrons flowing through will not dissipate much power, while a wire with lower resistance but a lot of electrons pushing through can dissipate more power. So it makes sense that the power dissipated in a wire goes up as the resistance goes up and as the current goes up. It turns out to be even more dramatic: the power dissipated goes up as the square of the current. That is, a wire carrying 2 amps of current will dissipate four times as much power as the same wire carrying 1 of current.
Using Power Dissipation
A wire dissipates an amount of power equal to the square of the current times the resistance. That power goes into heat. In many applications -- your computer, for example -- that heat is waste. It's power going into something you don't need or want. If you've got an electric blanket, an electric space heater or an electric range, then heat is exactly what you're looking for. In an electric range, for example, the wires leading up to the burner will have a low resistance, while the material of the burner has a high resistance. In that case, even though the current is the same all through the circuit, the wire won't heat up very much, while the burner gets hot enough to glow red.
Minimizing Power Dissipation
In an electronic circuit, however, you don't want extra heat -- it's wasted energy. But you need the current to do the work of the circuit, so you can't easily reduce the current to decrease the power dissipation. Instead, you have to focus on reducing the resistance. Designers have three ways to minimize the resistance, thus reducing the power dissipation: choose a different material, increase the diameter of a wire or decrease the length of a wire. You'll find all three strategies used in different applications.