Does A LiPo Batteries Catch Fire?

LiPo batteries are a recent introduction. They are particularly popular for remote-control aircraft and mobile devices due to their light weight. However, they are prone to small but intense fires and require special handling.
Chemical Explanation

LiPo batteries contain lithium. If lithium is exposed to air with even a slight amount of humidity, it can ignite, releasing hydrogen and other chemicals. Hydrogen is extremely explosive, and is ignited by the burning lithium, resulting in a violent flare-up.

Non-LiPo Chargers

LiPo batteries require chargers made specifically for them. Using the wrong type of charger is likely to cause a flare-up.

Physical Damage

Anything that breaks open a LiPo battery pack, even a small puncture, will likely result in a fire.

Physical Process

The usual cause of flare-ups is mishandling, which causes a build-up of gas in the battery, leading to a characteristic "LiPo puff" -- the swelling of the battery package. If the "puff" is large enough, the package may rupture, exposing the lithium to air.

Overloading

If too much current is drawn ("overloading"), the battery will become very hot and release gas internally. The battery will rupture, exposing the lithium to air, resulting in a fire.