Magic is a blanket term for supernatural abilities powered by energy referred to as Mana. The Overlord, The Wizard, Fay, Elves, and the known gods are the most prevalent examples of magic-using entities.
Magic and Mana can be used to cast Spells.
There are both good and evil flavors of magic in The World. The Overlord can use if for good or evil, while Fay, the Wizard (before his possession), and the Elves are known for using it to do good.