What is the working of a generator?

I answer assuming that the need is to know about electric generator. If so one can describe it in brief;

as an electro-mechanical device which converts kinetic energy into electrical energy. The basic concept is when a wire passes through a magnetic field, it causes the electrons to flow perpendicular to the field. Remember the right hand rule? If your fingers are in the direction of the field, your thumb is the direction of electrical current. Depending on the type of motor, the rotor (shaft) and stator (houses the rotor) will contain the wires or magnets. A motor is no different then a generator as it provides the kinetic energy by applying electrical energy.

Also, there are various types of generators. However, all starts from the basics. Anyos Jedlik gave birth to electromagnetic rotating devices.

So, it's good to get a background knowlege of generators from : http://en.wikipedia.org/wiki/Electric_generator
It also has links to different types of generators.