The true Istari

[Boromir88]

Good points Amrod and Rutslegolas. Also, the term "wizard" is more of a mortal name. The mortal races (mostly Men and Hobbits) see this man perform a power they don't have, it must be something "magical," so they call come up with the term "wizard."

Atleast in the Elves case, they don't call their powers "magic," they don't know the term. This shows me that they view their powers as more "natural," something that are in them. Mortal folk call their powers "magic," but the people who perform the magic, don't.

The Mirror of Galadriel
"And you?" she said, turning to Sam. "For this is what your folk would call magic, I believe; though I do not understand clearly what they mean; and they seem to use the same word for the deceits of the Enemy."

Galadriel makes a distinction between the term "magic," and her natural powers, she also makes a distinction between elven magic, and the deceits of the enemy. I view "wizard" as a more mortal term, sort of how Sam called the Elves' power "magic." Galadriel seems to refer to it as something completely different.