The Origin

It was first suggested by Gilbert that the Earth rotated because it was magnetic. Blackett who won the Nobel Prize for his work on cosmic rays, considered the opposite possibility, i.e, he suggested that there existed a universal phenomena that any rotating object was intrinsically magnetised. In those days, this theory did not seem such a wild idea. For instance, the electrons. But connecting the earth, Blackett guessed wrong.

Some even suggested that, the magnetic field was due to the presence of magnetic materials in the core of the earth. This theory was later discarded because at such high temperatures, the materials can't retain their magnetism. 

DYNAMO THEORY

The earth's inner core is solid. Outer core is liquid. At such high temperatures, the outher core exists in its ionic form. These ions are in constant motion. This constitutes a current which is associated with a magnetic field. Any electrical conductor moving relative to a magnetic field constitutes a dynamo. The earth's core is a dynamo too....The magnetic field produced generates more current in a self exciting manner. Such self exciting dynamos have been created in the labs too...they do show ocassional flipping.....But none of them can characteristically demonstrate the earth's dynamo.

Now any dynamo would require energy. Where does earth's dynamo get the energy from? Possible theories suggest that the energy for the dynamo is obtained by thermal convection arising from the heat released from the radioactive elements or due to latent heat of fusion due to the gradual soldification of the outer core....

A new theory suggests that, the liquid outer core of the earth at high temperature has plenty of ions in it. The earth's solid core rotates west to east  relative to the mantle. Relative to the solid core, the liquid core rotates east to west. Using Lenz's law, an east to west electric current mus also be induced in the innerpart of the liquid core. By Fleming's right hand rule, a south magnetic pole will be induced at the earth's geographic north pole. Today, the solid core rotates faster than the mantle because its volume is stretched in the N-S axis. But over longer times, its shape changes.It is oscillating between stretched in the N-S axis to stretching in the equitorial axis. When stretched in the equatorial axis, the solid core rotates slower than the mantle, This reverses the direction of the flow of teh liquid core and the induced current. This in turn results in the reversals or 'flipping' of the earth's magnetic field