I am starting with my first project with ESP8266. As soon as I connect chip to my laptop it is heating up a lot. In the first 2-3 tries, my laptop was throwing an error saying something like USB device needs more power and now it is not at all connecting to laptop. However, when I try to connect it again it is heating up a lot.
Can someone help/suggest what could be the issue and why this error has occurred?
Assuming your ESP8266 has a USB input connector, and your connection is directly from your laptop, I would look at these:
if anything else is connected to your board, disconnect it
Inspect your board for bits of wire or some conductive material.
Do not reconnect your board to your laptop. 2 to 3 tries is enough to tell you; unless you find something definitely wrong reconnecting will only make things worse.
In general electronics don't heal once it bad it stays that way.