Ionic compounds conduct electricity when dissolved in water because the movement of their negatively-charged and positively-charged particles forms an electrical current, explains About.com. In this liquid state, the charged ions separate and move freely, creating a current of electrical particles that conducts electricity.
Electrical conductivity measures the ability of a substance to produce an electrical current, whereas electricity is the movement of charged particles which form that electrical current. A current, in the electrical realm, is simply a flow of charges which requires free movement. For the electrical current to form, both movement and conductivity must be present.
Ionic compounds are formed when positively and negatively charged ions are bonded closely together. These ions are atoms that have gained or lost an electron, and they come together by transferring an electron in a process called ionic bonding. A positively-charged ion is a cation, while a negatively-charged ion is an anion. An example of an ionic compound is Sodium Chloride, NaCl, in which Sodium (NA) is the cation and Chlorine (Cl) is the anion.
Ionic compounds in their solid state have particles that are held tightly together, restricting all movement and preventing electrical current from forming. Consequently, ionic solids do not conduct electricity. When dissolved in water, the ionic bond is broken, which allows the charged ions to be separated and flow freely. The water provides the movement of particles and the separated ions provide the conductivity. Since both are present, an electrical current is created to conduct electricity.