[Melilot Brandybuck]

In "The Shadow of the Past" Frodo warns the eavesdropping Sam that Gandalf will turn him into a spotted toad. Further in the chapter, Gandalf tells Frodo that if Sam doesn't keep his mouth shut, he really would turn him into a toad.

Can Gandalf really turn people into other things? Is this in his power, or is he just using these threats to frighten gullible hobbits who don't know any better? It seems that if he did have this power, it would have come in very useful during their quest.