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I don't know the exact significance of the wizard's staff (how could anyone?) but it's clear that it was an important tool of the trade and one no wizard would want to part with. Indeed they seem inseparable, a Istari and his staff. Without it, he is no longer Istari, as the breaking of Saruman's staff signifies.
The importance of the staff is also demonstrated when Gandalf and company went to Edoras to see Theoden. When the company must hand over their weapons at the gate Galdalf refuses, saying it's just a staff for an old man to lean on. Inside, he raises his staff, does some powerful magic trick, and Theoden is cured. If he could do this without his staff, chances are he would have left it at the door, like his friends did their weapons.
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