Magic works using the human brain and nervous system. As you may know, these are basically just a giant electrochemical energy containment network, and only 10% of the brain's capacity is ever used at any given time. The remaining 80-odd% of the brain can be used to hold or channel raw energy, drawn from the environment. Energy can come from any sourceโthermal, kinetic, electrical,
et cetera
. Through endless practice, a mage learns to draw, project, and manipulate energy to produce all manner of effects.
In many cultures, magic use is linked to madness, and for good reason. If one tries to hold too much power at once or hold large amounts of power in the brain for long periods, it affects the energy system that comprises the mage's mind. Now that such things are understood, most mages take care not to draw any more energy than they require at a given moment, and generally don't hold more than a token amount of energy all the time. For extended effects, a mage can learn to draw energy while he is casting, allowing virtually unlimited use as long as there's a decent amount of energy in the ambient environment (there almost always is.)
Magical effects can also be permanently imparted to physical objects, a process called enchantment. It is relatively easy for a mage to set up an energy system in any given object to produce a specific effect, which is called a dwoemer. Over time, though, these 'lesser' dwoemers lose energy to the surrounding environment and will eventually disperse. A highly skilled enchanter can create dwoemers that restore themselves from ambient energy. These 'greater' dwoemers work forever unless dispelled.
Mages do
not
require wands or any other physical object to work magic. A wand is an enchanted object whose dwoemer produces any sort of active effect on command. Many wands are triggered by key words or actions, making them usable by anyone. They can be of any size and shape. The stereotypical small-wooden-stick wand is generally an offensive weapon that can cast one or more attack spells.
There is also another kind of ability which is not strictly magic, but is often lumped in with it. This is the field of psionics, the use of one's own mind to direct and project energy, without using a separate pool held in the rest of the brain. It is much more difficult to master than magic, and generally requires natural talent for one to become a psion of any usefulness. Though its potential for raw power is far less than magic, psionics are a highly prized niche in their own right.
Psions are much more effective than mages at reading and/or manipulating other minds. They also tend to be adept at telekinesis for unknown reasons. Lastly, the use of psionic abilities does not produce the telltale visual and aural effects that usually accompany magic (i.e. weird lights, sounds,
et cetera
).
Some parahumans and other sentient beings have their own intrinsic abilities, which are often generalized as magic. This suffices for common discourse, but is not, strictly speaking, always correct. Some beings, most notably elves and dwarves, do in fact practice magic. Most others do not; their abilities are classified differently by arcane scholars.
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I hope you found this both interesting and informative, gentle reader! :)
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