I am trying to attach a new exterior light to my house. But from the junction box there is only 2 wires, apperntly in the 40's the ground wire for the entire house was attached to the water pipe????? Anyway my question is what do I do wiht the ground wire of my fixture. Do i just attach it by otself to the green grounding screw or just cap it off with a wire nut?
If the box is not grounded, I would not connect to the green grounding screw. You might make someone in the future believe there is a ground. Since it is a bare wire it doesn't make any sense to put a wire nut on it. Coil it up in the box.
My electrical answers are based on 2014 NEC, you may have local amendments.