The idea of transfinite induction is pretty much like the one in mathematical inductions on the natural numbers:
Let $\cal C$ be a non-empty class of ordinals which has the properties:
- $0\in\cal C$;
- If $\alpha\in\cal C$, then $\alpha+1\in\cal C$;
- If $\delta$ is a limit ordinal, and $\delta\subseteq\cal C$ then $\delta\in\cal C$.
Then $\cal C=\sf Ord$.
Now we define $\cal C$ to be the class of those $y$ such that for all $x<y$, and for all $z$, $z+x<z+y$. We will show that $\cal C$ has the three properties and then we can conclude that it holds for any two ordinals.
Step 1: $0\in\cal C$.
Well, since there is no ordinal strictly smaller than $0$ it holds vacuously that $0\in\cal C$.
Step 2: Successor case.
Suppose that $y\in\cal C$, we want to show that for every $x<y+1$ and for every $z$, $z+x<z+(y+1)$. Let $z$ be any ordinal, and $x<y+1$.
- If $x=y$ then it is obvious, because $z+y<(z+y)+1=z+(y+1)$.
- If $x<y$ then by the assumption that $y\in\cal C$ we have $z+x<z+y<z+y+1$ (where the last inequality follows from the previous bullet).
Therefore if $y\in\cal C$, so is $y+1$.
Step 3: Limit case.
If $y$ is a limit ordinal, and for every $y'<y$ we have that $y'\in\cal C$, let us show that $y\in\cal C$ as well. Let $z$ be any ordinal, and recall the definition of $z+y$: $$z+y=\sup\{z+y'\mid y'<y\}.$$
Suppose $x<y$ then there is some $y'<y$ such that $x<y'$, since $y'\in\cal C$ we have $z+x<z+y'<\sup\{z+y'\mid y'<y\}=z+y$.
Therefore $y\in\cal C$ in the limit case as well.