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It's possible for the terminal wire to come off the post if it had a poor connection and overheated. I'ts more likely turning the nut to tighten or loosen the cable to the start relay did the job on the terminal. The nut that holds the terminal in place needs to be tight and one has to be careful not to turn the post itself when snugging or loosening the nut that holds the cable on. The rebuild sounds pretty reasonable. It's hard to know what caused the original failure, a burned contact in the relay, a bad connection in the starter that caused overheating of the terminal lead, who knows? Things happen, fix 'em and forget 'em.
 
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