I assume you are hard wiring it and not plugging it in. The power coming into the GFCI outlet connects to the line side of the GFCI outlet. If you want the outdoor timer protected by the GFCI then connect the wire going to the timer to the load side of the outlet. If you do not want the timer protected then connect it to the line side. On the back of the GFCI if you look closely you will see Line & Load marked on the back.
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Ground wire is loose or disconnected somewhere in that circuit.
No, except that you insert the wires into the holes on the back of the outlet. The power in connects to the LINE side of the outlet and power out connects to the LOAD side of the outlet. This is clearly marked on the back of the outlet. This will not only protect the outlet with the GFCI installed but all outlets receiving their power from that GFCI. If you do not want to protect the outlets receiving power from the outlet then connect that outgoing wire to the LINE side also. But know that only the outlet with the GFCI will be protected and all other outlets will not be GFCI protected.
Don't know what you mean by back wire, but most GFCI outlets have a circuit to attach additional outlets that will be protected by the GFCI. Keep total load in minds.
A GFCI receptacle can extend its protection to regular receptacles connected to the output side of the GFCI. Each actual GFCI receptacle should be directly connected to a breaker in electric panel.
Yes, you install a GFCI on a 2 wire circuit.