When it comes to wire gauge, size does matter. Hagerty's 12v enthusiast, Matt Lewis, gives a basic explanation of the importance of proper wire gauge and demonstrates what would happen with too much current running through a small wire.
A mechanic dealt with the hacked-mess of my 69 Mustang ignition wiring by doing a little hacking of their own.
I'd drive the car a little bit and get a faint plastic smell.
Took it for a longer drive and the source was found: main wires off ignition cooking their sheathing off (wire was too small). Luckily this was caught before it burned the car down.
Car is now fully rewired with a new harness --be a waste of all the other work that had been done to cheap out on the wiring was my thinking.
Similar issues can be caused by the proper gauge of wire, or the original wiring, if it is corroded. The corrosion increases the resistance in the wiring vs. the smaller diameter/gage noted here. I like to check the insulation ends for any signs of it, particularly with aged wiring. I also clean the various blade and ring terminals with a bit of scotch-brite pad or similar and apply a little dielectric grease in spots. Helps me worry a bit less...
Excellent points. I will also add that just because the ends of the wires appear corrosion free doesn't mean there's a huge lump poking out of the insulation somewhere in the middle of a battery ground wire.