Magnetic Induction

When a ferromagnetic object is placed near a permanent magnet, not only would it be attracted to the magnet, it would also become a Induced magnet.
This induced magnet would be then be able to attract other magnetic objects (if it is light enough).

Hence magnetic induction is the process of inducing (or bringing about) magnetism in ferromagnetic materials.

Magnetic induction can occur without any contact with the magnet as can be seen from the diagram below.

Non-ferromagnetic materials

The diagram on the right shows a bar magnet placed with the north pole on top of a piece of wood. Two nails are seen to be "attracted" to the wood. We cannot conclude that the wood has been induced magnetically by the bar magnet. It is the strength of the magnetic force (field) from the bar magnet that is able to penetrate the wood attracting the two nails. The two iron nails indeed become induced magnets. The pointed tips of these two nails are like poles, north poles to be exact. Thus they would repel each other explaining the reason why they seems to point outwards.

Magnetic Domains