When an alternating current flows in a coil in close proximity to a conducting surface the magnetic field of the coil will induce circulating (eddy) currents in that surface.
If there is a flaw in the surface immediately underneath the coil this will interrupt or reduce the eddy current flow.
This is the basis of eddy current testing. By monitoring the voltage across the coil in such an arrangement we can detect changes in the material of interest.
Applications of eddy current testing are: