We show for the first time the dynamical relationship between the generation of magnetic field-aligned electric field (E||) and the temporal changes and spatial gradients of magnetic and velocity shears, and the plasma density in Earth's magnetosphere. We predict that the signatures of reconnection and auroral particle acceleration should have a correlation with low plasma density, and a localized voltage drop (V||) should often be associated with a localized magnetic stress concentration. Previous interpretations of the E|| generation are mostly based on the generalized Ohm's law, causing serious confusion in understanding the nature of reconnection and auroral acceleration.