Basically it’s the ability of a ferrous material (guitar string) to retain a magnetic charge when it is near a magnetized substance (pickup pole piece). When the string is removed from the magnetic field, it loses it’s magnetism quickly. A magnet within a pickup is used magnetize the string so when it vibrates it causes the magnetic field to move back and forth through the coil and generates an alternating current of a certain impedance that is heard through an amplifier.