I too use the Coleman fuel. Occasionally I mix in just a bit of WD-40 to provide some internal lubrication; others here tend to run a mix all the time.
The basic idea behind most ignition systems is the use of a coil to generate high voltage, along with a way to induce and then break current in that coil. When the current is broken from the coil, the built-up electromagnetic force wants to go somewhere - and it is allowed to go through the spark plug. So here is a simple, mostly mechanical system:
A coil has its high-voltage output connected to a spark plug, and one lead connected to 12V and the other lead connected to a set of mechanical "points" - simply a momentary switch. The switch is connected to ground (usually via the engine itself). The cam shaft on the engine has a "flat" on it that allows the switch to close, completing the circuit in the coil and allowing it to charge up. Then when the camshaft turns to the point that the flat transitions back to the round, the switch is opened. This breaks the current in the coil, and as described above, the result is a high voltage spark from the high-voltage output, through the spark plug. The timing of the spark is controlled by the placement of the points (switch) relative to the flat on the camshaft.
There are additional refinements, starting with a condensor (basically a capacitor) attached to the points (switch) to help improve the spark and reduce wear on the points. Automobiles with this type of ignition would have a vacuum line from the engine that would adjust the ignition timing in relation to the speed of the motor.
One can replace some or all of the mechanical components with electronic components. For example, instead of points switching the current on and off, one can use a transistor. Instead of a flat spot activating the points, one can use a magnet and a "hall effect transitor," or some sort of optical switch, or other means to time the spark. Some electronic systems charge up a capacitor to deliver the spark. And so on ...
I would encourage you to spend some time reading through Wikipedia or other sources on ingition systems, and study the plans of some engines to see how they are implementing the ignition. I hope this is helpful ...