Daisy chaining is the practice of running wires from receptacle to receptacles via either back-stabbing (sticking the wires in holes in the back of the receptacle—left of picture) or using the screws on the side of the receptacle (center of picture).
(could be switches as well but for now we will discuss receptacles)
This is a poor practice, especially the back-stabbing approach, as every connection can result in voltage drop such that by the time you get to the end of the circuit the voltage drop affects the function of whatever is plugged in.
The side screw type daisy chain is not quite as problematic but with that method if something goes wrong with one receptacle it would affect any others downstream from the problem one.
A better practice is to wire-nut the wires together in the box, and then run a pigtail to the receptacle (right side of picture)—doing this for the ground wire, the “white” (neutral) wire and the “black” (hot) wire (sometimes the colors vary for the hot conductor).
The pigtail method is considered “best practice” but is obviously more labor intensive and therefor more expensive to have done.
Better modern receptacles also have plates with screws where the wires insert without bending and are tightened behind plates under the screw–this should not be confused with back-stabbing.
With back-stabbing there is a sharp upward sloping barb that prevents the wire from pulling out and this is the entire connection–the amount that sharp barb grabs onto the wire. This type of connection is especially problematic with aluminum wiring.
By Charles Buell, Real Estate Inspections in Seattle
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