The Supernatural and Magic: Overview

Belief in magic was almost ubiquitous in the ancient world. Science at the time had not advanced to the point where their is any real criteria to distinguish between "natural" and "supernatural". Even today, with a score or so decades of intellectual history separating us, many natural phenomena appear truly miraculous and many of our quotidian assumptions are tinged with magical thinking. Whether magic works in the game world is another story. Magical and ritual skills are certainly available to characters, but their effectiveness is a closely guarded game secret. Further, any assumption based on modern science isn't necessarily true in the game world. You can assume the Earth is round since the circumference was measured by Eratosthenes in DXII a.u.c.(though your character might not know this if he isn't up on his geography or philosophy), but there is no reason to even think that if you sail West from Ireland you will eventually hit Canada because no one would invent Canada who hasn't been there. Further you can assume that Ptolemaic astronomy is most likely accurate, since that was what the best evidence pointed to at the time (again unless your character is a sailor or philosopher it is unlikely that he would know this). Magic might be added just to liven up the game or get out of a sticky plot point.
While its effectiveness is in doubt, there is no question of magic's importance in the game world. In a world where everyone believes in magic there is power in even the appearance of supernatural potency. Almost all characters are superstitious, and most people react negatively to characters who aren't. Politicians and generals ignore the magicoreligious beliefs of their charges at their peril. There is money to be made magic, even fake magic; then, as now; magic is a great cover for conmen and the insane. So even if there is an effective "Ring of 7 wishes" there is no guarantee that the ring some one sold you with that name is not just a cheap brass ring.