"It's just a wondrous life of unlimited powers" -Max, Three Maxes and a Little Lady
"Powers" are abilities magical in nature, that allow those who posses them to do things ordinary people can't. Powers reside within a magical orb which can be removed through magical means and/or magically enhanced technology, but it seems that the DNA of the owner is what allows "powers" to be passed down generation to generation.
Despite the existence of various creatures and persons whom have ill intent, magic is never evil, nor good. It is morally neutral, and the moral implications of using magic are tied to the user.
The Various Categories of Magic Powers
There is a wide range of magical powers and abilities, which can overlap between categories and fall over into one of the following categories:
SupportiveSupportive powers are magical abilities that are neither offensive nor defensive, they are simply intended to assist the user. These powers are very useful and can be recalled through spells or willingly if the magical creature might posses it. Some of those powers include the ability to teleport, morph, and/or the halo capability to detect Angels.
Mental powers are magical abilities that allow the user to invoke illusions, magically control the body of someone or move objects with their mind. Those powers are mostly supportive in nature, but they have been used in battle throughout the series.
Powers related to the four elements are rare. Demonstration of those powers include the elemental spells used in the Wizard Competition or the ability of dragons to breath fire. There are also other powers such as flight, which technically is a air ability, but it's also physical.
Wizarding powers are those powers that require a tool, such as wand or a crystal ball. Those wizarding powers belong, as the name suggests, to Wizards but other magical creatures such as elves may possess them. Those powers are used through a set of words, called spells. Wizarding powers are unlimited, except for magical protections or magic-immune materials such as plastic. The powers seem to manifest itself into rainbow colored sphere's throughout the show of "wizards of waverly place" with the exception of "Family Wizard."
Magic powers can, however be removed, because they're contained with a magic orb surrounded by electrical-like sparks. Those orbs can only be removed through spells or enchanted technology. It seems however, that the orb just removes the magic from the previous owner, as Jerry's children still gained wizarding powers even after he gave up his magical abilities.
List of Powers
This is rather uncomplete