I don't understand why the live and neutral pins have to be wired a certain way. Surely with AC it shouldn't make any difference?
It does make a difference if you're earthing things.
When they generate electricity, they generate it in 3 phases - 3 "lives", effectively, all at 415V (RMS - if you need to ask, you don't need to know

) PD with each other. There is a "virtual" neutral which is the null point between all the phases, which happens to pan out at 220V between each phase and that neutral.
So, from the point of view of your house, what you have is a "live" conductor (which is actually one of those phases), whose voltage oscillates either side of the "neutral" conductor. The neutral conductor isn't actually tied to earth (except in some installations) at your house, but is near enough at earth potential.
So a neutral-to-earth short would not represent a significant hazard (though still a fault), while a live-to-earth one would.
It's less of an issue now, since many appliances are double-insulated, and thus don't need earths, and you can in practice wire most things either way around. But it's a bad habit to get into, since appliances which do need earths, such as metal-cased ones, do need to be wired up the correct way around.