I think what the Doctor said actually was intended as a reference to "The Dalek Invasion of Earth." However, Terry Nation (or whoever actually wrote that bit of dialogue; by 1975, Nation's contributions to the actual shooting scripts of the Dalek stories was in the midst of the long period of gradual decline, even though he was still credited as the sole writer) misremembered the details of how the events of the 1964 story had played out. The rough details are not that dissimilar: The invasion occurs in the year 2000 and something, and the Dalek's plan involved somehow messing with the magnetization of the Earth's core by exploding a bomb at the center of the Earth and then somehow making use of the modified magnetic properties of the planet to fly it back to Skaro's solar system. Fortunately, Ian found that the Dalek's had left some lumber lying around, and he was able to single-handedly scotch the Dalek's plan to send a device to the center of the earth by blocking the railroad track the device was mounted on. (The volcanic eruption that finished off the Dalek installation was just a secondary knock-on effect of detonating the bomb too close to the Earth's surface.) So what the Doctor describes sounds a lot like an incompletely remembered version of "The Dalek Invasion of Earth." It sounded approximately right, and that was enough for the production staff at the time.
This might seem strange today (not so much strange that there might be trouble remembering what had happened in an episode from more than ten years earlier, but that no one bothered to check the continuity); however, at the time, there was extremely little attention paid to maintaining past continuity. "The Dalek Invasion of Earth" had not been broadcast in Britain in years, and under the prevailing opinion of the time, the early episodes were considered ephemera that were certainly not worth preserving for their own sake. Into the 1980s, the BBC was regularly deleting the master (and, in many cases, only) copies of episodes from their older library. (This is best known for the effect this had on Dr. Who, but some other shows that were never as popular suffered even more; there are BBC television series that ran for years but which are now completely lost. It is also a powerful testament to how lean the BBC's budget actually was that a significant motivation for these erasures was that they wanted to save money by reusing the magnetic tapes.)
In 1975, the show's production staff was not expecting that anybody watching "Genesis of the Daleks" would be likely to remember the details of what had happened in "The Dalek Invasion of Earth." It's actually easy to see that throughout the 1970s and 1980s, a surprising amount of material was produced that referred back to older elements of the show—yet which included serious errors that showed that nobody had actually bothered to read the scripts of the older episodes. Even after John Nathan-Turner, who was a long-time fan of the show and really liked references to older villains and other elements, took over as producer, it seems like a lot of the backwards references were based on little more than personal memories, brief capsule summaries of storylines, and whatever promotional photographs they happened to have on hand. We known now that all the production scripts for the early episodes still exist in the BBC archives, and there are audio tape recordings of the lost episodes that were made by viewers; however, it seems that it simply never occurred to anyone to do the research and seek these things out as part of preparation for new Dr. Who stories.
This led to continuity errors in the show itself, like this one from "Genesis of the Daleks," and there were plenty more problems in other merchandise connected with the show. To take a couple examples (both from a bit later, 1983, which was well into Nathan-Turner's tenure and producer, when there actually tended to be significantly more attention paid to the show's long-term continuity than there had been five to ten years earlier, around when "Genesis of the Daleks" was made), I could mention the Dr. Who Technical Manual, which is full of obvious errors, especially in its histories of the Daleks and the Cybermen. The early parts of those histories sound just like they were based on very brief summaries or half-remembered recollections of "The Daleks" or "The Tenth Planet"; clearly, the author, Mark Harris had not consulted the actual episode scripts. This was clearly not a product of laziness; Harris produced some impressive plan and perspective drawings of elements from the show. On the other hand, he clearly did not always know what he was looking at—such as accidentally including the feature film Dalek designs (with pincers) among his retrospective of historical Dalek designs. There were similar problems in the Radio Times Doctor Who 20th Anniversary Special. The magazine included information about every companion and every story through the history of the show. However, for many of the older shows, the information was clearly based—again—on brief summaries or dubiously accurate personal memories. This led to numerous mistakes; most glaring, in retrospect, was that how the First Doctor's companion Katarina had died in "The Dalek Master Plan." The episodes had been lost, but had the still-extant scripts been consulted, presumably they could have given a correct account of what happened. Apparently though, nobody bothered.
So there was a long-running pattern of not putting much effort into providing accurate descriptions of things that occurred early in Dr. Who's run. This affected the show and its merchandise. In other words, the answer is probably that the incongruity was simply due to, as you said, "poor continuity checks."
