This is the idea that magnetism can travel from one object to another even though they are insulated. An example of how magnetic induction is used is in transformers.
Two coils of wire are wrapped around an iron core. The primary coils are connected to the power supply while the secondary coils are connected to the device.
An electromagnetic field is created from the primary coils and this induces a magnetic field in the core. This in turn induces a current in the secondary coil.
The number of coils is proportional to the amount of voltage, so a transformer is used to increase or decrease the voltage.
secondary voltage secondary turns
primary voltage = primary turns