The best way to understand wiring diagrams is to look at some examples of wiring diagrams. Click on any of these wiring diagrams.
The environment of the installed wires determine how much current a cable is permitted to carry. Because multiple conductors bundled in a cable cannot dissipate heat as easily as single insulated conductors, those circuits are always rated at a lower "ampacity". Tables in electrical safety codes give the maximum allowable current based on size of conductor, voltage potential, insulation type and thickness, and the temperature rating of the cable itself. The allowable current will also be different for wet or dry locations, for hot (attic) or cool (underground) locations. In a run of cable through several areas, the part with the lowest rating becomes the rating of the overall run.
In the United Kingdom, wiring installations are regulated by the Institution of Engineering and Technology Requirements for Electrical Installations: IEE Wiring Regulations, BS 7671: 2008, which are harmonised with IEC 60364. The 17th edition (issued in January 2008) includes new sections for microgeneration and solar photovoltaic systems. The first edition was published in 1882.
Generally, single conductor building wire in small sizes is solid wire, since the wiring is not required to be very flexible. Building wire conductors larger than 10 AWG (or about 6 mm²) are stranded for flexibility during installation, but are not sufficiently pliable to use as appliance cord.
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