Because people live and move on a plane. There are also two other named directions, “zenith” and “nadir” but because most humans move on the plane and not above/below it, they are less used. And with 4 points (actually just two axes) you can describe all movement on the plane: “three steps east + one step north” is sufficient to describe your position. The most common way to arrive to a consensus on naming those directions is to look at phenomena that most people in the immediate vicinity experience the same – like sunrise/sunset. Now that you have the two most obvious defined, you can also agree on the others, and they are basically perpendicular to east west, and conveniently named north/south. The fact that you can use magnetic needles to point to them is just an added convenience. But in general there is an infinite number of directions you could use. Instead of saying 6°N you can call it “Phillip”. And hope that other people accept your convention and know where to go when you tell you’re at Philipp and west corner….
Why is the New World considered west is another convention – after European exploration and map making, it made sense to put themselves in the center, eventually imperial powers landed on the prime meridian that divides the hemispheres into West and East.
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