Many writers who have created a magic system says that there is no right or wrong when you create a magic system. However, you're going to create your own rules that can't be broken. If you write that the magic user ends up in pain for using magic you can't write that he/she can use it unaffected. You need to be consistent and keep to your own rules.
Some magic systems are not named or explained and fantasy writer Brandon Sanderson calls these systems for "soft magic". "Hard magic," he says has written rules that are clearly stated in the story. You'll find "hard magic" in for example the trilogy Mistborn and "soft magic" in The Lord of The Ring. Though, it's fine if you want to mix between the two.
You need to have fixed rules for your magic system, because a magic system can create difficulties for you when you're telling the story. Sanderson says that this is going to help you when you're writing your story and it will also make the story seem more real to the reader.
Kristen Kieffer has listed six steps for how we can create a magic system:
STEP #1: DEFINE ITS USE.
How does magic manifest itself? What fuels its use? How does the user summon magic, and what abilities does it give the user?
STEP #2: IDENTIFY ITS USERS.
What are magic users called in your story world? Is magic inherited, gifted, obtained, or learned? Are there different factions of magic users? Can anyone use magic, or is it exclusive to a certain few?
STEP #3: OUTLINE ITS LIMITATIONS.
Is magic or the source that fuels it a limited resource in your story world? Can magic be stolen or quelled? What effect does the use of magic have on the user? Is there a cap on the users' magical abilities? How could a magic user be defeated?
STEP #4: ESTABLISH ITS DANGERS.
Can magic be used incorrectly or for selfish purposes? Can it be used to harm others or cause destruction? What dangers does magic pose to the user, whether directly or because the use of magic is scorned or envied by society?
STEP #5: EXPLORE ITS ORIGINS.
How was magic created? Where does it source its power? Are there different types of magic, or did magic diversify over time? What important historical events in your story world were affected by the use or failure to use magic?
STEP #6: CONSIDER ITS CULTURE.
Is magic kept secret in your story world? If so, why? Are there magical societies or a hierarchy of magic users? Is a magic user marked by their clothing, appearance, or some other distinguishing factor? Do magic users have their own language, religion, festivals, or other cultural hallmarks?
She continues on the topic that you also need to ask yourself if the magic system is going to have a small role in the story or a larger one. This is totally up to you and God speed in selecting what fits your story best.
You can find Kristen Kieffer's blog post here and Brandon Sanderson's here.
What is your take on creating a magic system?
Remember to follow your dreams!