Can someone explain the ranking system to me?

[Kamikaze28]

Points (and Rank): Points are currently more a reflection of activity than skill. The resulting ranking in a division is therefore also a reflection of activity compared to others in the same division.

Divisions: Divisions are there to give you a comprehensible and meaningful leaderboard of 100 people. So instead of being ranked #13,458 of 84,514 you are #13 of 99.
They are not meant to be comparable to each other in regards to skill, although this could happen by accident. A more reliable indicator of skill is the League.

Leagues: Leagues are a skill based division of players into 5 groups. Your skill is tracked by the server and not displayed in the game to keep you from worrying too much about the outcome of matches and prevent cheesy behavior. Promotions and demotions are tied to this hidden matchmaking rating. Once you demonstrate to the system that your current league is too easy for you, it will match you against players from the league(s) above you and test your wits (pun intended) against them. If you prevail, you will eventually be promoted.