Explain the underlying principle and working of an electric generator by drawing a labelled diagram. What is the function of brushes?

Principle: 

Electric Generator works on the principle of Electromagnetic Induction. When amount of flux linked with the coil changes, an e.m.f. is induced in the coil.

Working:

As the armature coil is rotated in the magnetic field, angle θ between the field and normal to the coil changes continuously. Therefore, the magnetic flux linked with the coil changes. An e.m.f. is induced in the coil.

The function of Brushes: 

The purpose of brushes is to pass on current from the armature coil to the external load resistance.