Gandalf is a Maia (a demi god), and a servant of the Valar. His powers are much restricted in Middle-earth, though his real power seems to be in his organization, his wisdom and his courage. "Powerful wizard" has come to mean, with modern fantasy, someone who has magical powers and can shoot dragons and kill people with a snap of his fingers, yet we forget that true power lies in knowledge and kindness, and Gandalf possesses both.
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"Hey! Come derry dol! Can you hear me singing?" – Tom Bombadil
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