Why is earth the largest magnet?

Well, first off the magnetic fields on the Sun, seen as plasma loops, are enormous compared to the size of the Earth - perhaps millions of km in altitude from the Sun's surface. These are the largest 'local' magnetic fields, both in size and strength.

Bringing our feet back to the ground and considering the magnetic field of the Earth, this is probably caused by thermal effects in the outer core of the Earth generating electric currents, which in turn generate a magnetic field. The interior of the Earth is much too hot (about 6000K) to sustain any magnetic material. (see Curie effect). The field we see is the net field resulting no doubt from many disparate contributions, and which do vary in strength and location.