Can an inguinal hernia cause blockage?

Yes. A hernia is said to be incarcerated when a structure within the abdominal cavity gets "stuck" within the hernia. If this happens to be a loop of intestine, this can cause blockage and lead to the blood supply of the intestine being cut-off; we call this a strangulated hernia. If one has a large, tender lump in the groin that cannot be pushed back in, this requires emergency md attention.
Yes. Bowel may find itself in the hernia sac. This is dangerous if the bowel gets trapped inside, causing blockage or loss of blood supply. If the hernia is big enough that bowel easily escapes, then obstruction is less likely to occur.