How does magnetism create electricity?

Here is the short of it. Moving magnets over one an other produces electrons as the opposite poles pass each other. The closer the space between the magnets the stronger the field resulting in more voltage but limited by the strength of the magnets and the speed they travel at

Moving magnets cause electrons to flow in a wire.
If you move a magnet past a coil electricity will flow.
If you move a coil past a magnet electrons will flow.
The distance between is important.
The opposite effect is also true. Moving electricity makes a magnet. - an electromagnet
An electromagnet is made stronger by ore coils or putting an iron core inside the coils.
It is not exactly the magnetic field itself, but a moving field that causes electrons to move.

In natural magnets it is unpaired spinning electrons that create the magnetism. Iron, the most magnetic, has 3 unpaired electrons all spinning the same way. Unpaired is important because in a pair, there is one spinning clockwise and one spinning counterclockwise, cancelling the effect. So the spinning electrons, are moving, and create a magnetic field. When all the fields of all the atoms are alligned, you have a strong magnet.

Magnetism does not, by itself, create electricity...

Consider this: Electricity is kinetic energy but a static magnetic field, by itself, is not an energy source...

When you change things like moving the magnet or the wires (like in a generator) or you change the magnetic field (like in a transformer) you can generate electricity...