The points function as a circuit breaker for the primary circuit of the ignition system. The ignition coil must boost the 12 volts of electrical pressure supplied by the battery to as much as 25,000 volts in order to fire the plugs. To do this, the coil depends on the points and the condenser to make a clean break in the primary circuit.
The coil has both primary and secondary circuits. When the ignition is turned on, the battery supplies voltage through the coil and onto the points. The points are connected to ground, completing the primary circuit. As the current passes through the coil, a magnetic field is created in the iron center core of the coil. When the cam in the distributor turns, the points open, breaking the primary circuit. The magnetic field in the primary circuit of the coil then collapses and cuts through the secondary circuit windings around the iron core. Because of the physical principle called electromagnetic induction, the battery voltage is increased to a level sufficient to fire the spark plugs.
When the points open, the electrical charge in the primary circuit tries to jump the gap created between the two open contacts of the points. If this electrical charge were not transferred elsewhere, the metal contacts of the points when they open and thus prevent the points from becoming pitted or burned.