As Tolkien made it quite clear that "magic" in his world is the power native to the being wielding that "magic," I have wondered about the nature of an Istar's staff for a long time. While there appears to be some connection between the staff and power, I think it is more symbolic than real. The staff may act as a conduit for the wizard's innate power at his whim, but I really haven't seen anything that convinces me that it is
necessary for the wielding thereof. There does appear to be something about them that makes them important to the Istari -- why go through the rigamarole of breaking Saruman's staff if there was not some point to it?
Finally, after a good thirty or more years of puzzling over this, it finally occurred to me: the wizard's staves were not the only ones Tolkien mentioned; there was also the staff of stewardship of the Stewards of Gondor. The wizard's staff may be an emblem of office, as the white staff is an emblem of the office of the stewards of Gondor. After all, Gandalf did say to Denethor, "I am also a steward. Did you not know?" That was the real job of Istari in ME, to be stewards who would teach and guide the people for the protection of their world against the "illegal" incursion of Sauron. It was a visible emblem of their office, possibly given to them by the Valar when they were sent on their mission, and as such it would be quite important and precious to the wizards, as a scepter or crown or any other signet of office is to any person. Embodied in the human form with its many burdens both physical and emotional, they probably became quite attached to them, and would not want to lose them, or hand them to another save at great need. The breaking of Saruman's staff would thus be akin to the breaking of a king's scepter, or Denethor's deliberate breaking of the Steward's staff: a sign that the office was at end, that the reign was over. Saruman's tenure as head of the Istari ended, and his staff was broken.
Just my thoughts, as ever.
