There are some basic elements to every circuit. There is the source of power, the positive conductor, the negative or return conductor, and the load. See http://www.energyquest.ca.gov/story/chapter04.html

Conductors are generally wire or cable, but there are other conductors such as circuit boards, distribution boards or buss bars. The simplest circuit has a positive wire going to the load, and a negative wire coming back. However, this would hardly be practical because the power would always be on. So there are generally two other devices in a circuit. The first is a fuse or circuit breaker. See Marine Fuses and Circuit breakers.  http://bluesea.com/viewresource/95  This should be as close to the power source as possible because it's job is to protect the wire to the load. Then there is a switch to turn the device on or off. Here is a diagram of a simple circuit.

 

All DC circuits are based on this simple model.

Here is another simple circuit diagram that is slightly more detailed.

As you can see the negative wire from the battery is connected to the outboard engine. It would be connected to the block if this were an inboard engine. This establishes the ground. See SailMail http://www.sailmail.com/grounds.htm  There is a fuse or circuit breaker near the battery. ABYC standards, Federal regulations, and ISO say it has to be within seven inches (17.8 cm)of the source of power. This protects the wire between the battery and the positive distribution bus.

This is an important point that is often misunderstood and needs to be repeated. Fuses and circuit breakers protect the wires, not the equipment. The danger is that the wire will get too hot, melt the insulation, and start a fire.

If you look at the positive distribution bus, you will see that there is also overcurrent protection immediately after the bus.  That is because the bus is considered the source of power for the connected equipment. It too must be within seven inches of the bus bar. There are exceptions. See Over Current Protection on Electrical Systems Page 1 After that there is a switch to turn the equipment on or off. An exception is the bilge pump. Bilge pumps are usually wired directly. Most have a built in float switch, that turns the pump on when the water gets to a certain level and a bypass switch to turn it on manually.  Bilge pumps may have a small in-line fuse that protects the pump from burning out if something clogs the pick up, and water stops flowing. Below is a typical distribution bus bar. This one is in the negative or ground side of the circuit. The large wire connected to the bolt on the left end is the wire from the negative post on the battery.  All the other wires are negative wires to various pieces of equipment.

By the way, notice how neat and tidy and organized this is. Wiring should always be organized and neat. The only thing that would make this better is a tag or label for each wire naming what equipment it is for.