Magic Gems are gems mined from mines, produced by Gemstone or Crystalline dragons, or synthesized by Dragonsai Giving Trees or Dragonsai Bushes. They are used by wizards to use slight bursts of Chronomancy or in parks to speed things up. They are also used as a currency for more valuable items, like the Lost Island, Hybrid Dragons and Epic dragons (including Gemstone and Galaxy dragons), valuable decorations, Island Themes and much more, and can be traded for DragonCash. They are one of the most highly regulated materials in DragonVale due to their association with Chronomancy.
For more information about Magic Gems, see The Science of Gems.