Your rocket was launching. Something went wrong. It is outside of the safety corridor. The range control attempts to terminate the flight, but the Flight Termination System (FTS) fails. Now what happens?
It depends on if at least some engines are on. In the event of a failure where no thrust is being generated (all engines are off), the rocket crashes according to its ballistic trajectory (where ever it was already going before the failure occured). On the other hand, if the engines are still producing thrust it will go wherever it's malfunctioning thrust, control, engine, or whatever else it is leading it. The point being, we can't control the rocket (which is basically a massive tank of flammable propellant with a some exterior). It may fall down on populated areas. It could actually be fine and fall on unpopulated areas are be broken up by aerodynamic forces high above the ground. Of course, this isn't something that people want to risk. There is also something else you should note. Flight termination is the last resort. Destroying a rocket and its payload, sometimes costing lifes or billions of dollars is not preferrable. The only reason that a Flight Termination System will be activitied is if the rocket endangers civilians lives. This is why the Flight Termination System (also known as FTS) must be fail-safe. After all, people designed and manufacturing a payload or astronauts riding on rockets have volunteered for the risks of spaceflight, civilians in their homes have not.