The primary windings of the coil ground through the points when they close. The windings inside the coil are electrically isolated from the coil's container. The coil is basically a stepup transformer.
On the coil the pos terminal should have battery voltage when the key is turned on. The neg terminal of the coil is where the wire that runs to the dist-points and condensor connects. The only time that primary ignition circuit is grounded is when the points are closed.
With the key on and the points are closed, current flows from the battery, through the primary coil windings, to the points to ground. This same current also charges the condensor.
When the points open, the current flow through the coil stops and this causes the voltage that was produced in the primary coil windings to be induced into the secondary (high voltage0 windings of the coil. The secondary windings have exponentially more windings than the primary and this is what steps up the voltage to 1000's of volts. The secondary windings ground through each spark plug and the high voltage produced by the coil is large enough to "jump" the gap at the sparkplug tip to ground. Ofcourse the arc produced by the high voltage jumping the gap is what ignites the fuel/air mixture in the cylinder.
The condensor is basically a capacitor and it's function is to prevent the points from arcing when they start to open.
And IMHO, the condensor also helps in collapsing the field in the primary windings by reversing current flow from it back to the lower voltage potential of the battery voltage when the points open but this is just my humble opinion based on basic principles of DC voltage/current and capacitor operation.
Basic battery ignition at its most basic
Dave
