Magic has always presented a bit of a problem for me, psychologically speaking, because it is by definition something which exceeds reality, and in some ways I have a very down to earth and detail oriented mind.
The problem with magic in Lismore is that it's not strictly defined and there are practically speaking no rules saying what magic can and can't achieve.
In the real world powers are very strictly limited by "physical principles" or "laws of nature" which define what is and is not possible, and we, for the most part understand these things. If Superman picked up a mountain or an ice berg and held it up over his head... it would collapse under it's own weight and bury him under chunks of rock or ice - the material simply isn't strong enough to be lifted in that fashion. In our world Superman would be limited the laws of nature.
If superman has super strength and laser vision you'd have to explain in a thermodynamically reasonable manner where the energy came from, how it was stored and produced. And how he avoided breaking his bones with his own strength. And these limitations would inevitably limit his abilities.
In Lismore the universe simply isn't specified with this degree of precision. If I write up a large flying animal such as a dragon, I am not required to specify the tensile strength of his wings, the energy requirement of flight, or the strength to weight ratio of his bones. These things are assumed. They're "magic." More or less.
With less intrinsic magic, or "spells" the problem is even worse, there is more or less no limit on our imaginations (beyond what Ash thinks is reasonable). There's no reason at all why I can't think up a spell that casts a fireball or a freezing ray or disintegration or throwing people backwards or forwards in time or space, and attempt to justify it. There's nothing that says "this kind of magic would work" while "this other kind obviously wouldn't."
Game designers and fantasists have long struggled with this question, and a lot of the time end up inventing systems or theories of magic, often quite elaborate ones. I liked Larry Niven's series "The Magic Goes Away" where excessive use of magic in a particular place would use up all the manna there and end up creating a magical dead zone, for instance.
Or Robert Jordan's Wheel of Time where males and females access completely different kinds of magical power, with different rules and spells and objects.
Or even Advanced Dungeons and Dragons which clearly lays out what a magic user can and cannot accomplish.
The point of an overall magical system is as much to limit and shape what magic can't do, as what it can. In the same way as laws of nature shape what we can and can't do in the real world.
Imagine if all magical power flowed from the Goddess, so if you used it to do anything she didn't like then there would be consequences... Bang! An instant shaping and limitation of magical ability based on one simple rule.
For the most part in my personal relationship with magic I like to think about a rule that I call Balance. Essentially, I think, magic is a force that seeks Balance. Hence magical excess of any kind in any direction must tend to correct itself over time.
It's a lot like Karma, hell, maybe it is Karma. I just tend to feel that magic should tend to seek a moral and physical balance with itself. Those who tend towards violence and oppression and subjugation through magic use will tend to find their own magic and actions coming back to oppose them.
Buddhist theory says that to oppose evil directly is to give it strength - a clear demonstration of Balance. Go off crusading and building and fighting and improving the universe and doing magical Good Good Good... and I think you find the evil and resistance to your efforts will increase in proportion, and the centre cannot hold, things fall apart.
In line with these ideas when I tend to think about magic I normally think of it as a power that must contain the elements of its own destruction. Its like a double edged sword - it cuts both ways. So its strength must also be its weakness.
Take... oh, for example, a magician with the ability to cast freezing spells. How can this ability to cause cold contain its own downfall "naturally" in a way that maintains Balance? Well, say with every cold spell some of the heat she nullifies is transferred back to her? So if she casts the spell too often she'll overheat, suffer from heat stroke, and maybe even cook herself. It's a spell which is self limiting by its own nature.
My attempts at magical design in Lismore have all been healers and psychics. But that doesn't rule out the principle of Balance, simply because they are doing things which are either non-physical, or "good." A simple application of Balance to a healer would be that they have to take some or all of the pain or disease or damage into their own body in order to heal. The idea I used was that if a healer can give out magical energy then it follows that this energy might be -taken.- The giving nature of their talent may make them vulnerable to magical vampires who drain the healer of their vitality in order to fuel their own spells. And it's almost a given that healers can't heal themselves...
With psychics the more or less traditional application of Balance is that seeing and knowing the unseen also makes you visible and known to the unseen world and it's denizens. To be psychic or clairvoyant or telepathic is to be vulnerable to haunting and posession and mind control and insanity.
In writing about Lismore and The Wilds I've often found I've had to gloss over or "forget" about certain instances of magic and magical characters which were just too big, too blatant, or just never did fit with any kind of continuity of story. I don't generally have a lot of truck with magic myself, and when I do it is generally some kind of an application of the Principle of Balance. Nothing is ever lost, what goes around comes around. To fight against someone is to strengthen them, to destroy them is to set them free. There is a Balance, and the more you try to grasp it and control it and bend it to your will the more it will control your destiny.