Used generically, AC refers to the form in which electricity is delivered to businesses and residences. The electrical current in your house is alternating current. This comes from power plants that are operated by the electric company. Those big wires you see stretching across the countryside are carrying AC current from the power plants to the loads, which are in our homes and businesses.
Alternating current is generated when a conductor is exposed to a magnetic field that constantly changes its polarity. At a power plant, an electrical generator rotor rotate a coil of wire connected to magnets to create an artificial magnetic field that constantly reverses polarity, inducing an alternating current on the generator stator coils of wire. This rotating magnetic field was invented by Nicolas Tesla, an American inventor born in Croatia.