The process by which certain materials, primarily Iron, Cobalt, and Nickel, as well as several alloys spontaniously aquire a large net magentic moment. Most materiels are only paramagnets, and weakly become magnetized in the presence of an external magnetic field, but are otherwise not magnetic.
This individual electrons within a metal have a spin which in turn gives them a small magnetic moment. In general, these spins can point either up or down, and in most materials, interactions between the electrons are small enough that individual spins point more-or-less randomly, leaving a zero net magnetization.
In ferromagnets, however, the the Pauli Exclusion Principle and the Coulomb repulsion between electrons conspire to cause adjacant electrons to have their spins point in the same direction.
Roughly speaking, the Pauli principle prevents two electrons with the same spin from being in the same place at any given time, but makes no such guarantee for electrons with opposite spin -- In fact, if they are both confied to the same area, the probability is highest to find them near each other. However, since electrons repel, having them near each other causes the total energy to be higher. Thus, if adjacent electrons have the same spin, they will lower the total energy of the metal, so that is the prefered configuration.
A very interesting result of all of this is that it doesn't directly depend on the magnetic properties of the electron. If electrons had an intrinsic angular momentum, but no associated magnetic moment, this behavior of all the spins lining up in the same direction would still happen. | 
