That's my understanding, but I'm no expert. A quick look on google about rods touching turns up nothing but articles about Fukushima. Nothing saying what happens when rods touch.
I'm not an expert either, and without going to quote sources, here's the quick and dirty.
Fuel rod assemblies consist of uranium oxide pellets embedded strategically in a zirconium alloy cladding (basically, advanced ceramics). Each pellet by itself isn't particularly harmful*, and at the outset of a fuel cycle, it's mostly pure fissile material with very little waste*.
As the reactor runs and the material runs through the fission process in the reactor, waste products build up as the fuel converts from one form of uranium into another. These byproducts are non-fissile and much more harmful and radioactive than the uranium itself, and they affect the reaction, which is why they eventually have to change out the rods, and then leave the old rods in spent fuel storage.
The rods themselves will give off heat due to radioactive decay. The fission process itself generates orders of magnitude more heat, which is why it's used to generate the heat that turns the turbines to generate the power.
If the rods were not cooled properly, this decay heat would quickly distort and warp the cladding on the rod, allowing the pellets to move closer to one another and mingle within the same rod and from adjacent rods. At some point, you would reach the critical point of the fissile material (this doesn't mean a nuclear explosion) but it still does mean one hell of a mess to clean up... millions to billions of curies of reaction byproducts released to the atmosphere, and anyone within the vicinity of the criticality dead from radiation poisoning or the explosion.
The overheating of the rods is what fucked them in the first place in three of the reactors; when the cladding breaks down, it reacts with water in some fashion and either electrolyzes it or some other reaction and releases large quantities of hydrogen as a free gas.
If this is happening inside your reactor core and your vents to containment are not working properly, or you shut them on purpose because of other problems, you are going to go BOOM after awhile, which is exactly what happened. They blew out the containment building walls from hydrogen explosions.
Incidentally, this is also the problem that was happening at Three Mile Island once the water level fell critically low. Fortunately, they realized what was happening in time to get water back into the core and someone else also miscalculated how bad hydrogen buildup really was (it wasn't as bad as they expected and they had started emergency mitigation measures), and they didn't get an explosion. The core was still ruined, but Cumberland County is still inhabitable. That's the difference.