Step1: Evaluate left-hand side
$(-4)^{\frac{1}{2}}$ represents the square root of $-4$. In real numbers, $\sqrt{-4}$ is not a real number (it is the imaginary number $2i$).
Step2: Evaluate middle expression
$\sqrt{(-4)^2} = \sqrt{16}$. The square root of a non-negative number gives the non-negative root, so $\sqrt{16}=4$.
Step3: Evaluate right-hand side
$\sqrt{16}=4$, not 2. Also, the initial step of equating $(-4)^{\frac{1}{2}}$ to $\sqrt{(-4)^2}$ is invalid because $a^{\frac{1}{2}}$ is defined as $\sqrt{a}$ only when $a\geq0$ for real numbers.