As per the most established theory it is because of the rotation of the earth where by the several charged ions there in the molten state in the core of the earth rotate and constitute a current.

(1) The magnetic field of earth is similar to one which would be obtained if a enormous magnet is assumed to be buried deep inside the earth at its centre.

(2) The axis of rotation of earth is known as geographic axis and the points where it cuts the surface of earth are known as geographical poles (Ng, Sg). The circle on the earth's surface perpendicular to the geographical axis is known as equator.

(3) A vertical plane passing by the geographical axis is known as geographical meridian.       

(4) The axis of the huge magnet supposed to be lying inside the earth is known as magnetic axis of the earth. The positions where the magnetic axis cuts the surface of earth are known as magnetic poles. The circle on the earth's field perpendicular to the magnetic axis is known as magnetic equator.