Intermittent Ignition Issue [66 Valiant /6]

On startup fell to 12.6v before stabilizing again at 12.5 on idle.
That's either an amazing battery or a slow responding voltmeter.
Idle should be at least 13. something volts.
At 1250 rpm it should be around 14 Volts and not increase any further with increasing rpm.
Watch the ammeter and note what it shows. That in conjunction with voltage measurements can provide a lot of insight to what is going on under various conditions.

There’s these wires:
BAT, IGN1, IGN2, ACC, and GRD.
To clarify a little. The terminal labels on the relay, the key switch, and other similar components are similar but not the same as the wire names in the shop manual.

Lets use this diagram to kill two birds with one stone.
1702959162159.png

If the key is run and the ammeter is showing discharge, that shows power is coming from the battery.
Once the engine is running, the alternator should be supplying power to run the car and recharge the battery. Ammeter should show charge when charging battery, and be centered after that.

Battery wires are labled begining with A.
Ignition wires begin with J, and the slightly confusing part is
J1 is the power feed to the "ignition switch"
Ignition 1 (run) is circuit J2 and Ignition 2 (start) is J3.
Accessory circuit begins with Q
The explanations posted earlier by 67Dart should be clear enough.

Starting sequence illustrated here.