But it's not the first time that a ringwraith approached within a few feet of the ring, and was cast off by the power of the Elves. In the shire, the arrival of Gildor and his company force the Ringwraith to flee, also. Granted, that is just an ordinary ringwraith (assuming there is such a thing), and not the Witch-King himself, but Galadriel's Phial is the light of the Silmaril, and therefore it is itself more powerful than Gildor's presence. I think that Sauron's minions feared the Elves very much...
We are already told (at least by implication) that Galadriel and even Aragorn (a mortal man) had been able to contend with the Eye and come out victors, surely the Witch-King, necessarily weaker than his master, especially on the physical plane, would not prevail against such enemies?
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<=== Lookee, lookee, lots of IM handles!
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