Okay, let's break down this situation and address your questions based on the historical context and the current NEC.

Is this ground wire considered part of the grounding electrode system? No. The ground wire you describe, wrapped around box nails and connecting multiple boxes, is not part of the grounding electrode system. The grounding electrode system (ground rods, water pipes, etc.) is intended to provide a direct connection to the earth for dissipating fault current. This wire connecting boxes serves as an equipment grounding conductor (EGC). It is intended to provide a low impedance fault path back to the source of power (panel) should a fault occur in equipment connected to the receptacle.

Was this method of receptacle replacement once allowed? Likely, at least in practice. Electrical codes in the late 50s and early 60s were evolving, and enforcement varied widely. It was a common practice for the time.

Is installing a grounded receptacle this way today ok? No, generally, this method is NOT code-compliant today. However, under certain circumstances it may be allowed under the exception allowed in 250.130(C)(3). NEC 250.130(C)(3)

Equipment grounding conductor. Where an equipment grounding conductor is not run with the circuit conductors, the equipment grounding conductor for receptacle replacement(s) shall be permitted to be connected to any of the following:

The grounded conductor run with the circuit. The equipment grounding conductor of another branch circuit serving the same area on the same floor. The grounding electrode system as described in 250.50. An accessible location on the grounding electrode conductor. Exception No. 1: For replacement of nongrounding-type receptacles with grounding-type receptacles and where there is no equipment grounding conductor in the box, a grounding-type receptacle shall be permitted to be grounded to a metal box that is grounded to the grounded circuit conductor in accordance with 250.130(C)(1). Exception No. 2: Ground-fault circuit interrupter replacement receptacles shall be permitted to be installed in accordance with 406.4(D)(2).

NEC 406.4(D)

Replacements.

(D)(2) Non–Grounding-Type Receptacles. Where a grounding means does not exist in the receptacle enclosure, either a non–grounding-type receptacle(s) shall be installed or a ground-fault circuit interrupter (GFCI) type of receptacle(s) shall be installed.

Informational Note No. 1: The installation of a non–grounding-type receptacle(s) shall not be used as a requirement to mandate the installation of a grounding means.Informational Note No. 2: See 406.4(D)(3) for continuity requirements where grounding-type receptacles are installed to replace non–grounding-type receptacles. (D)(3) Continuity. Where a grounding-type receptacle is installed and becomes the only means of grounding equipment, the equipment grounding continuity shall comply with 250.118.Analysis of your situation in light of the NEC


Is the metal box itself reliably grounded? This is critical. The wire connecting the boxes alone does not guarantee that the boxes are effectively grounded. There are several reasons for this:

Corrosion

The nail connections are prone to corrosion, which can significantly increase resistance and reduce the effectiveness of the ground path.

Mechanical strength

A nail is not a reliable means of making a solid electrical connection. The wire can easily become loose or disconnected.2.

NEC 250.130(C)(3) Exception No. 1 and NEC 406.4(D)(2) and (3)

If there is no equipment grounding conductor in the box, you have the following options: Install non-grounding-type receptacles. (You are not required to add a grounding means.) Install GFCI receptacles. (These do not require a grounding conductor for proper operation, and provide shock protection.) Ground the replacement receptacle to the metal box ONLY if the metal box is grounded to the grounded circuit conductor in accordance with 250.130(C)(1).3.

250.130(C)(1)

If the metal box is grounded to the grounded circuit conductor, you can ground the replacement receptacle to the metal box. However, this method should only be done with extreme care. It is considered a high-impedance ground.

What to do in this situation (Best Practices)


Test the grounding path

Verify the impedance of the ground path between the metal box and the service panel. If the impedance is high, the existing "roaming ground" is not adequate.2.

Consider running a new equipment grounding conductor

The best solution is almost always to run a new EGC back to the panel. This provides a reliable, low-impedance ground path. This may involve running a new circuit.3.

GFCI Protection

If running a new EGC is not feasible, installing GFCI receptacles is a much safer alternative. GFCI protection will protect against electrical shock, even without a grounding conductor.4.

Consult with a Qualified Electrician

If you are unsure about the best course of action, it is always advisable to consult with a qualified electrician who can assess the situation and provide guidance based on the specific circumstances of the installation.

In summary:While the practice of using a wire connected to box nails as an EGC might have been common in the past, it is not compliant with modern electrical codes. Prioritize safety by either running a new EGC or installing GFCI protection. And most importantly, consult with a qualified electrician if you have any doubts or concerns. Flag for review