Even though the correct wire size is used for the amperage that is to flow through the wire normally, the circuit may be accidentally grounded, allowing a dangerous amount of amperage to flow. A circuit can be grounded by a wire's insulation chafing through and contacting a grounded conductor, by the failure of equipment in the circuit or by accidental grounding of the circuit during maintenance. There are two primary methods that CPDs use to determine that excess amperage is flowing in a circuit. Thermal devices open to break the circuit and stop the current flow in response to heat generated by the excess amperage. Magnetic devices react to a magnetic field created by excess amperage.
Circuit breakers can be either thermal or magnetic devices or a combination of the two.
The short answer is yes. The longer, and more accurate answer is more complex and beyond the scope of this discussion. As amperage ratings increase circuit breakers become relatively more expensive than fuses. Generally, fuses are less expensive for a given rating, but circuit breakers are resettable and don't require the purchase of spares, as do fuses. Also, circuit breakers can be used as switches.