In CNC, a "crash" occurs when the machine moves in such a way that is harmful to the machine, tools, or parts being machined, sometimes resulting in bending or breakage of cutting tools, accessory clamps, vises, and fixtures, or causing damage to the machine itself by bending guide rails, breaking drive screws, or causing structural components to crack or deform under strain. A mild crash may not damage the machine or tools, but may damage the part being machined so that it must be scrapped.
Many CNC tools have no inherent sense of the absolute position of the table or tools when turned on. They must be manually "homed" or "zeroed" to have any reference to work from, and these limits are just for figuring out the location of the part to work with it, and aren't really any sort of hard motion limit on the mechanism. It is often possible to drive the machine outside the physical bounds of its drive mechanism, resulting in a collision with itself or damage to the drive mechanism. Many machines implement control parameters limiting axis motion past a certain limit in addition to physical limit switches. However, these parameters can often be changed by the operator.
Many CNC tools also don't know anything about their working environment. Machines may have load sensing systems on spindle and axis drives, but some do not. They blindly follow the machining code provided and it is up to an operator to detect if a crash is either occurring or about to occur, and for the operator to manually abort the active process. Machines equipped with load sensors can stop axis or spindle movement in response to an overload condition, but this does not prevent a crash from occurring. It may only limit the damage resulting from the crash. Some crashes may not ever overload any axis or spindle drives.