Earth orbits the sun without crashing into it, because Earth is constantly travelling very fast (1040.4 mph) on a path that, if the sun did not have gravity, would take it in a straight line past or away from the sun. Since the sun does have gravity, it pulls Earth and makes it turn just a little towards the sun, but the Earth is going so fast that as the sun pulls it, it is already in a slightly different place and doesn't get pulled all the way in. It is like Earth is tied to the sun with a string.

Several good discussions to this have been given on ScienceLine here . Essentially, the Earth falling toward the sun, but is also moving sideways fast enough that it misses the sun instead of colliding.

Gravity pulls the earth toward the sun, but the sideways momentum of the earth means the earth follows a circular path. The earth has enough sideways momentum that it goes around, rather than straight into, the sun.Everything in the universe is constantly falling toward and missing something. Another example is the astronauts on the International Space Station. In videos, they appear to be in a zero-gravity environment. Actually, they are in free-fall around the earth and constantly missing it.

Here is a wonderful answer for your question:
Earth not hitting the sun

The Earth is in orbit around the sun. This means that the Earth has enough sideways speed that, as it falls, it curves its motion and falls around the sun, instead of actually falling into it. This is the same reason why the moon doesn't fall into the Earth.

The simplest way to explain it is that the Earth has very bad aim - although it is always “falling” towards the sun due to gravity, it is always missing.

The Earth is always moving in a trajectory to the side of the sun, or more accurately, perpendicular to the vector from the sun to the earth. The sun’s gravity keeps the Earth from flying off in a straight line, and the Earth’s momentum in the direction described above keeps it from falling directly into the sun. This means that the Earth ends up going around in a roughly circular (technically it is an ellipse) path around the sun. At every point the Earth wants to fly off but at the same time the sun wants to pull it in - the result is that the Earth goes around and around the sun. This general concept is called conservation of angular momentum, and is the basis for many physical phenomenon which involve objects that go around in circles.