WizarDru
Adventurer
By whom? Certainly not by the Valar. As Olorin, Gandalf was considered the wisest and most important of his order as a Maiar servant of Manwe. Saruman was determined to be the most powerful and led the Istari...but when they reached the Grey Havens, Cirdan the ShipWright gave the ring of Narya to Gandalf...not Saruman. Even then, some could tell who was truly the wisest of them.Zweischneid's Wrath said:They are envoys of the Valar (closest thing to gods in ME) and their powers reflect that. Radagast the brown certainly came from a Valar of Nature, Saruman from on of the most powerful and Gandalf originally was the least important and least powerful.
Only humans truly used what might consider 'magic' per se. The elves merely did things so wondrous, they appeared as magic to other races such as men and hobbits. In fact, they found the use of the term 'magic' distatsteful and odd...as that, in their minds, confused their skills at making beautfiul things with the Enemy's foul black arts. References are made to humans and possibly some others who actually use magic (one way that Sauron was able to put off suspicion as 'the necromancer' for some time, presumably), particularly the Numenoreans.
Generally, however, magic is very subtle and quiet in Middle Earth. To the elves, simply making things well was tantamount to magic to other races. Consider the examples of the elven cloaks, lembas bread, elven rope or Sting. Humans could do similar things, but in many cases, these were humans who had mixed with elves or had learned their arts. And by the time of the Third Age, most of such items or examples are handed-down from distant ancestors. It is doubtful that Aragorn could curse an entire host of men the way that Isildur did, nor that Gimli and his kind could forge the same weapons even as the King under the Mountain. A central theme of LotR is the fading of the elves and of magic.
And let's be honest, the single biggest question about representing Middle Earth in game terms is magic. Aragorn could be modeled several different ways (and you see examples of how over at the d20 Middle Earth site). Setting aside the Istari, the question is to devise a system where magic is possible without cheapening it, and yet making it simialr to Tolkien's very "anti-Vancian" style. Gandalf casts, between LotR and The Hobbit, something on the odds of a dozen spells, at most? And many of these would barely qualify. Some of them are so sublte as to be difficult to discern. A case could just as strongly be made that Gandlaf was a Bard, Cleric, Psion, Psionic Warrior or Paladin with some powerful artifacts on hand. It's not beyond the realm of reason that he has no true powers at all, as we understand them. And given how subtle LotR magic generally is, and how rare it's practicioners, it may not even be a relevant question. Except for the Istari and some servants of the enemy, we know of no major characters who would qualify, to begin with, unless they're elves, and as I said before, they don't perform anything even similar to what we would consider Vancian magic.
The second biggest problem is the nature of the elves, who are, in almost every way relevant to a game, superior to humans, dwarves and hobbits. They are the first race of Arda, created by Illuvatar himself, and possess far more advantages than any other group. Finding a way to balance them against other players in a game context is a challenge. Not an insurmountable one, but one that has to be acknowledged, regardless of what system you're using.