I am not a physicist, but think of it like a portable source of gravity. It creates a hole like Wile E. Coyote uses on things that it magnetically attracts: The Road Runner is non-magnetic and pretends like the hole doesn’t exist and doesn’t fall into it; the Coyote falls right into the hole. (Do not confuse this with the Coyote’s painting a tunnel on the side of a hill, that is a different concept.)
A magnetic source does not need to be as big as the earth because electro-magnetism is 39 orders of magnitude stronger than gravity. http://www.lewrockwell.com/orig9/hogan1.html100,000,000,000,000,000,000,000,000,000,000,000,000 times stronger. So a tiny magnet can steal a paperclip from earth’s gravity well with ease. Gravity is called the “weak” force for good reason. It takes a huge amount of mass to have an amount of gravity that people can experience.
Why, then, do you ask, can magnetism not suck the moon down? Well, gravity doesn’t cancel out over distance and works at a distance. Magnetism drops off in power exponentially over distances. http://www.magnetsales.com/Design/FAQs_frames/FAQs_2.htm Gravity drops off in inverse proportion only and extends to infinity. http://www.physicsforums.com/archive/index.php/t-176879.html Household magnets have virtually no effect mere inches away. The earth is a giant magnet, and when a charged needle is well balanced on the end of a pin, that needle will align itself with earth’s magnetic field. A compass is what I call such a device. The entire earth’s magnetic field is not enough to rip the compass needle from your hand, but it is enough to tip a well balanced needle.
On edit: Lastly, I want to point out that scientists think they have a pretty good handle on what electricity and magnetism are. And compared to gravity, they are right. We really don’t know the sub-atomic particles that cause gravity, assuming that’s what causes gravity. We do know for electro magnetism. The LHC in Cern that is not going to destroy the world may show us particles that cause gravity. That is one of the experiments that it is designed to perform.