A basic AC circuit, like the one that powers the light bulb in your house, requires two wires, called hot and cold. For the circuit to work, both wires have to be attached to the light bulb through the socket. The hot one is attached to the tip of the bulb, and the cold one is attached to the side of the bulb. A normal switch turns off the light bulb by breaking the path of the electricity in the hot wire. The electricity can not get through and complete the circuit, so the light bulb is turned off.
About Two-Way Switches
A two-way switch is a little bit more complicated. The term refers to a pair of switches that control the same circuit. In a two-way switch, electricity can flow if both switches are turned to the "up" position or both switches are turned to the down position. If one switch is up and the other is down, however, the circuit will not light. This system is very useful in homes, particularly on stairs. You can turn on the light at the bottom to walk up the stairs in the evening, then turn the light back off again at the top.
How Two-Way Switches Work
Instead of turning the current on and off, a two-way switch moves the current to one wire or another. It is sort of like a train switch, directing a railroad onto one track or another. If both switches are attached to the same wire, the current can flow onto that wire and off it into the light bulb. If one circuit is on one wire and the other is on the other, however, the current can't get through. It flows onto that wire, but can't flow off.