Magic comes in two forms in this realm. There is what is known as natural or arcane magic, and artificial or chaotic magic. While both schools of magic have the same or similiar spells, arcane magic is usually a little more powerful.
Only the elven people can harness the powers of natural magic, while other races must turn to chaotic magic. Those that practice chaotic magic are generally thought of as evil people, due to the fact that a lot of damage has been caused by non-magical people trying to use chaotic magic.
Since only the elves can use natural magic, they have a huge leeway point. They help the humans out, making magical items and artifacts for them as well as protecting them with their magic, as long as the humans help them out via use of trade routes and other resources.