"How about all of the above? The non-magical people have advanced in huge leaps and bounds since the late 1600s, so much so that their own technology could be classed as magic. I can picture the loophole being as simple as pointing out magic as nothing more advanced or mysterious as how to program the VCR and taping a show off the telly. "Yes, I can make "object A’ do this by using this remote control device known as a wand." That's no different than describing how to brooms fly without obvious means of propulsion or wings."