When the device is connected between two sections of the circuit, the electric current goes through the coil. According to the theory of electromagnetism, in that instant the permanent magnetic field of the magnet begins to exert a force over the coil. As a consequence, this moves around its axis and the needle deviates a bit from its initial position.
The steering angle is equivalent to the intensity of the current that goes through the veil. This allows to graduate the scale of the device if we employ currents with a known value. The same instrument allows us to measure intensities (connecting it in series), or differences in power (if we connect it in parallel).