Ferromagnetism in iron is understood to arise from the alignment of electron spins, which lowers exchange energy despite increasing kinetic energy. In iron, the decrease in exchange energy outweighs the increase in kinetic energy due to the narrow bands of 3d electrons, resulting from localized 3d orbitals with minimal overlap between neighboring atoms. Ferromagnetic materials exhibit high relative permeabilities and can retain magnetization without an external field. The phenomenon is characterized by the alignment of spins in regions known as domains. Understanding these principles is essential to grasping ferromagnetism in iron and similar substances.