I am sure not more than 25% of Google AdSense publishers (including me) are aware of the minute details of Google's AdSense policies. Are you ready to dispute?
Ok, then about this point in Google's terms and conditions?
* Your website or blog should not publish copyrighted materials
* In fact, your site should not have links to such sites similar to Torrent sites, free download of copyrighted software, ebooks etc.
If Google finds you violating these conditions, Google will not serve AdSense on such web sites/web pages though Google won't ban your AdSense account.
You would receive an email from Google with subject, "Google AdSense ad serving has been disabled to your site". Surely, you would notice a chill up your spine when you read it in your inbox.
What to do if such a situation arises?
Read this most informative article from Harsh Agrawal of Shout me Loud blog.
Harsh Agrawal's shoutmeloud.com contains valuable information for bloggers. Every blogger who is serious about becoming a problogger should subscribe to his blog's feed.