Fuses are used to protect electrical circuits from overheating and causing fires.  Every conductor has resistance and the heat it generates (ie, power it absorbs) can be calculated by P = I2 * R.  If more heat is generated than can be dissipated into the air, the conductor can overheat and melt.  Conservatively sized wires do not overheat from normal electrical loads.  Fusible links were used in automotive applications so the manufacturer could get away with using lower-cost, thinner wires.  Fuses blow quickly when the current passing through it reaches its rating.   Fusible links take longer to overheat and can withstand temporary excess current for longer periods than fuses.  See Fusing of Wires by Electrical Current.

Fusible links are governed by SAE Standard J156 and appear to use the same stranded copper wire as SXL (special purpose cross-linked) with XLPE (chemically cross-linked polyethylene) insulation automotive primary wire used in engine compartments where higher heat resistance is required according to SAE J1128.    Fusible link wire has fusible link markings and Hypalon insulation, which is better for containing molten copper than XLPE insulation.

The standard practice for fusible links is sizing it 2 AWG even sizes (4 numerical sizes) smaller than the wire they are protecting.  For example, a 16 AWG fusible link is used inline with a 12 AWG wire.  Replacement fusible links should be about the same length as the original and are generally about 5-6" long.  Using too long of a fusible link will cause an excessive voltage drop because of its smaller size.

Mopar Fusible Links (from Service Manuals)

Size - AWG
Color Code Color
10 DGN Dark Green
12 BK Black
14 RD Red
16 DB Dark Blue
18 GY Gray
20 OR Orange
22 WT White

 

Delphi Fusible Links (White Products Fusible Links Specifications)

Size Color Markings
22-ga. - 0.35 mm Orange (Rust) 0.35 SQMM FUSIBLE LINK
20-ga. - 0.5 mm Gray 0.5 SQMM FUSIBLE LINK
18-ga. - 0.8 mm Blue 0.8 SQMM FUSIBLE LINK
16-ga. - 1.0 mm Black 1.0 SQMM FUSIBLE LINK
14-ga. - 2.0 mm Gray 2.0 SQMM FUSIBLE LINK
12-ga. - 3.0 mm Blue 3.0 SQMM FUSIBLE LINK
10-ga. - 5.0 mm Orange (Rust) 5.0 SQMM FUSIBLE LINK
8-ga. -8.0 mm Black 8.0 SQMM FUSIBLE LINK