OK here's how things work...
Every character has at least one "innate power". This is the "base" ability they can use. For example: the lead character "Jareth" starts out with "Shock", which is a basic electrical power. Jareth is a magician, though he also knows how to use some weapons. Supporting character "Tuscan", who is more of a knight-type character, has only two innate powers, "Knockout" and "Rush". Supporting character "Yakusa" is a pure magician; she has many innate powers, such as "Flames", "Chlll" (ice! hehehe), and "Create Steel". She can pretty much
only use magics; her weapons selection is extremely limited.
Now, each piece of equipment can be outfitted with one or more "Artifacts". These are powerful items that, among other things, can enhance a character's powers. Equipping certain artifacts onto your equipment gives you new spells and abilities. Also, the weapons and equipment themselves can be modified to expand on their abilities, and that sometimes includes being able to attach more artifacts. The artifacts system is similar to the materia system in Final Fantasy 7, complete with "linked" and "unlinked" slots.
As stated before, some powers can be merged. Generally speaking, this is where a character combines the effects of an attack magic with that of a support magic. Take a look at Tuscan's example, Knockout + Rush. Knockout is an attack magic, and it's being merged with Rush, a support magic. That's a merged spell.
Combination magics are the most powerful but require more than one character to use. Basically, when certain spells are cast in sequence, their energies align with each other and form an entirely new magical effect. It is required for characters to cast their spells next to each other for these to work. This is similar to the same system used in Phantasy Star 4.
So this is where some input would be great. Innate powers, artifacts, merge magics, and combination magics...all of these can use some new entries. And anything goes, as there are a lot of characters (over 30 playable characters throughout the course of the game).
There's more...there's always more.
Just as magic is a science in the game, so is non-magical combat. Weapons and armors aren't just universal things you tack onto a character like in most console RPGs; each has its own class and can only be used by certain characters. What's more is that each has its own set of effective "rules". Some weapons, for example, are one-handed, some are two. Some can be dual-wielded, some can only ever be single-wielded, some allow the use of a shield and some do not. Some can slash, some can stab, others are for smashing things. Each type is effective against certain attributes. Which leads to armor types...each is different, again. For example, chain-type armor is very strong against attacks that slash but not as strong against attacks that pierce. Plate-type armor is strong against both slashing and piercing but not as strong against crushing. Enemies also have this system, though it's not always obvious how they will work. As a general rule though; if the enemy looks like it has claws, you can count on it having a piercing-type attack and therefore a plate-type armor is most effective against it. If your enemy is an insect-type monster, a blunt weapon is going to do well against its plate-like body. Enemies with high agility, such as flying creatures, are best to hit with rapid piercing-type weapons, such as a crossbow. So weapons combat becomes more than just "oh this armor has higher defense, it's better, and this weapon's attack is the highest so it's the best" kind of thing...it's another whole strategy. The good part though is that you can change your weapons during combat to better deal with whatever threat you're facing. Also, most equipment modifies other statistics, especially a character's agility, speed, and accuracy. So you have to be careful and smart in how you equip your characters.
