Question: Gandalf doesn't need his staff to do magic, or does he?
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Answer: This is difficult to answer. Tolkien, in the books, appears to tie the use of magic to the staff. There are several times that staffs are lost or broken and it is inferred that the Maia (the race, if you will, of wizards) is lessened by it. However, Gandalf is able to defeat the Balrog after he lost his staff at the chasm in Khazad Dhun. To do that, he needed his powers although he died in the process. So it doesn't seem that he absolutely needs his staff to do magic, but it certainly helps.
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