An ignition coil is basically like a transformer with a very high turns ratio. The primary has a few turns and it is fed with the battery 12 volts. The secondary has thousands of very fine wire and results in providing an extremely high voltage that makes the spark at the spark plug. I know this because I have dissected one when I was may be 15 years old.
If the primary is left connected to the battery, it will burn up after some time and that is why in older cars, people do not leave the ignition on, if the engine is not running. The transformer action happens only if the primary is interrupted. This is done by inserting the contact breaker points in the primary circuit. To prevent the contact damage due to arcing there, a capacitor is put across the points. It does not serve any other purpose. So, basically, the primary circuit goes from the battery (+ve), starter switch, the contact breaker points and ends up connected to the ignition coil primary. The other end of the primary is grounded. The battery negative is grounded, so completing the circuit. When the engine turns, the contact breaker points are opened for a split second and closed again. If you think of the time, the “open time” is smaller than the “closed time.” The magnetic field generated in this “pulsing” scenario builds up and collapses accordingly. When the circuit “makes,” there is a back emf generated in the primary which generates an opposing current there and this makes the filed weaker compared to when the circuit “breaks” when no back emf generated.
On the secondary side, the HV goes through the distributor to each spark plug in sequence of the firing order. The spark plug body is grounded as we know. Other end of the secondary coil is grounded along with the primary coil grounded end, which we call the common end (connected inside the body of the coil housing). The three terminals on the ignition coil is the common end, the primary coil input and the HV output.
The timing of the primary “break” can be made to coincide with distributor rotation such that the distributor makes the connection to any given spark plug at the time the “break” occurs, by adjusting the distributor position.