Refer to figure.
A magneto is a self-contained, engine-driven electrical generator designed to supply a high voltage to the sparking plugs. This is achieved in a timely sequence for a precise compression stroke.
In order to break the gap between the sparking plug electrodes, the magnetos consist of a rotating permanent magnet surrounded by a U-shaped stator of soft iron, around which a thick primary and a thin secondary winding can be found. The thick winding (primary) is the low-tension element of the circuit and consists only of a few turns of thick wire. Whereas the thin winding (secondary) is the high-tension element of the circuit consisting of numerous thin windings that act as a step-up transformer. As a consequence of this arrangement, any electrical current in the primary circuit (thick winding) will induce a higher voltage in the secondary winding.

Both windings will be supplied with alternating current from the permanent set of magnetos as they’re driven by the engine. Another important aspect you need to understand in the principle of magnetos operation is that the primary winding will be continuously broken and then restored by a contact breaker. The contact will be broken by a permanently rotating breaker cam which main task is to break the primary circuit.

The reason why we need the primary circuit to get broken is that this will create a collapse in the primary’s winding magnetic field that will produce an increase in energy in the secondary winding. The second reason is that the normal AC produced in the primary winding will be converted into a series of pulses. The general outcome of this sequence of actions will result in a series of very high voltage, low current pulses of electricity that will be fed to a distributor. The distributor’s task will be then to spread these pulses through a high-tension leads to the spark plugs.