Found this on the web and it is a simpe explination on how a points ignition system works.
The Primary Circuit
With the contact breaker points closed, a 12v current flowing from the car's battery induces an electro-magnetic charge in the primary coil (1). At the same time, a small capacitor, or 'condenser', placed in parallel to the circuit is also charged for an auxiliary purpose.
As the engine-driven distributor drive shaft rotates, a corner lobe of its cam pushes the contact breaker points open, breaking the primary circuit and preventing the primary coil from charging any further. The condenser acts as dampener at this point, preventing current from arcing (jumping) across the open gap in the breaker points, ensuring that the circuit is broken cleanly.
The Secondary Circuit
Once the primary circuit is broken, the electro-magnetic field in the primary coil (1) becomes unstable and begins to collapse. This charge is then transferred to the inner, secondary coil (2), at which point the transformer effect drastically increases the voltage from 12v to around 10,000v, whilst proportionally decreasing the amperage. This pulse of high-voltage electricity is then taken away from the secondary coil through a high-tension lead to the rotor arm, which is mounted on top of the rotating distributor drive shaft. At this point, the rotor arm is aligned with one of its contacts. The pulse passes through this contact and along a second high-tension lead to the spark plug. At the end of the spark plug is a small gap, the other side of which is earthed to the negative side of the battery through the vehicle's engine block. As the pulse jumps across this gap, it effectively short-circuits and a large spark results, igniting the air/fuel mixture in the cylinder and beginning the engine's power stroke.