There is no exact defenition of what magic is, though everybody seems to know what you are talking about when you mention it. Throughout the years, the word has been used in stories about witches, wizards and beings like that, and referring to what illusionists do: a trick to fool and entertain people. Now the old religion of wicca or witchcraft is gaining strength again, a new way of spelling is invented, to prevent confusion. The new witches spell the word as "magick". (please note that witches aren't old, ugly women who try to do nasty things to everybody, but they are people who follow a pagan religion mostly referred to as "witchcraft" or "wicca") I choose to use the normal spelling, because I think the difference in meaning will show in the context.
   I think using magic is doing or creating things not so much with your body, in the material world, but more with your mind or spirit, in the spiritual world, and that the effect of the action is noticeable in both worlds.
   Everything contains energy, but this energy doesn't remain in the same place, it flows through the whole creation. From the sun to a herb to its environment, etc. We receive energy and give it back again, and nothing is ever lost. (It's the circle of life, the best recycling system ever invented) This magnificent system enables us to live, our universe to be. There are very many ways to receive and to give energy. I already named the energy we all receive from the sun directly, and we can receive parts of the energy of a herb or animal by eating it. We receive the energy, store it and use it when we need it, and while using it we also share it, mostly in warmth. But we can also exchange energy in many different ways. By paying attention to someone, for example, we send a small amount of energy to that person, positive or negative. That is why you can feel someone staring at you before you see him. In a conversation we exchange, except for words, energy. People need this kind of energy just as much as the energy we get by eating, it is like food for the mind, an absolute necessity. One cannot live without other beings that share their energy, even negative. And so people have developed many behaviour systems in order to get attention.
   But what has this to do with magic? Magic is using this energy to achieve something. Lots of people use energy without being aware of it, so most of the time the word magic is only used when people do this in a conscious way, but both are magic. You can send energy to a person to heal him or to hurt him. The way to heal people with energy is called healing, and some kind of photography (I thought it was called Kirlian photograhy) can show the rays of energy that come from the hands of healers when they are helping people. Healers mostly don't use their own energy, because -though no energy is lost- their energy would be used and flow away from them.
   One of the things that is most important in magic of any kind, is faith. I think when you believe in something very strong, it is or will be true. "That by which man think, the world is created, daily new."* When you believe a stone will heal you headache, no matter the stone is purple, green or blue, found by a virgin in a full moon night or stolen by a thief in full daylight, the stone will heal. It isn't that the stone doesn't have powers of itself, but the power of your faith is the extra factor that makes it work. It is like you send lots of energy to the stone to help it healing you. On the other hand, when you really believe it won't work, it indeed won't work with you, like you are able to block the stone or something. I don't really understand how this works and I don't know if anyone does, but I believe it to be something like this. (magic uses faith but faith isn't magic though I think every religion to be magical in its own way)
   Now having faith that something is the way you want it to be (like fakirs walking over fire believing it is cold) is very hard, and this pure way of magic is not often used, and only by very few people. Most people use small or large rituals, and all kinds of objects and symbols to perform magic. A ritual is an action in the material world that symbolizes an action in the spiritual world, and thus makes it easier to believe, using the principle: seeing is believing. Lots of religions/spiritual paths use symbols and object, and each of them has its specific meaning and use. In all rituals, each word, symbol and object is of great importance because of that meaning. Some say, that a spell can only be done with a stick of an oak, others claim it has to be of an ash tree. These differences are important when you believe them to be important. Since the faith you have in the object/ritual you use, decides for a great deal the strength of your magic, it is very important to sort out the objects that symbolize the right thing to you. So when the books or other persons say that this stick really should be oak or ash and you think it to be alder, you will use alder and it will work just as well for you as the other options for the others.
   Remember always: the tools you use are (only) symbols of the tools you use in the spiritual world (like courage and wisdom), and whatever features they have, when you think them to symbolize the right thing, they will symbolize the right thing. This also states the importance of writing rituals yourself. Perhaps not entirely, but great parts of them. I usually base my rituals on already existing ones, adapting and changing things to my situation and believes. For when you use text you have written yourself, it will have exactly the good meaning, while another text might not be as accurate. Besides that, it is easier to memorize.
   When you still have your doubts, you can always do some research in books or ask someone, but following your intuition is very important. The first people who worked with magic also found it out themselves. It is not like the Spirit of the West will get upset when you call him with a green candle instead of a blue candle, because it is the intention that matters. That leads me to something else: lots of people divide magic in two types: black and white. I think that not the magic is coloured good or evil, but that the intention decides the colour, it depends on the one using it. To harm someone or to heal someone, you need the same knowledge and often you can use the same methods to use magic. Like faith is of great importance for the strenght of your magic, the intention decides the outcome. Knowledge always has been a powerful weapon, not good or evil by itself, this depends entirely on who is using it and how he uses it. It is the same with magic. The most important rule (and the only I know of) in witchcraft is: "an thou hurts none, do what thou willst" (or something like this), and means that you are free to do whatever you want in every way you like, as long as you don't hurt anybody, including yourself.

* a quote of Marion Bradley from her book The Mysts of Avalon.