My opinion of how Magic should work is a force that is part of the world, like water or magma.
On worldgen, it is determined where areas of high and low concentration are.
Dwarvern magic is bound to artefacts, or items that have gained artefact status from continues use (like soldier's weapons).
It's effect is decided on creation, and unknown until it is used.
Dwarvern magic is used by simply using the item as intended. A soldier could be slashing Goblins with his Masterwork Shortsword, when suddenly focus swaps to the battle, and a pop-up appears, informing you:
Urist McSwordsman has unleashed UristBlade's fury!
A cloud of blood fills the air!
Magic would be randomly generated, using a variety of effects and materials.
However, due to this, things could go different ways.
Urist McLimpy has unleashed UltraCrutch's power!
Urist McLimpy's skin has become like Slade!
Urist McLimpy has unleashed MegaCrutch's strength!
A wave of fire is unleashed!
Some items would be one-use, some would be reusable.
The chance an item would have a magic effect, or how often that effect would be used, would be based upon the concentration of the magic in the area. Concentration is also based upon random rules at world gen: Some worlds have higher concentrations simply because dwarves are nearby, some have trees act as a drain for magic.
Spells could act like Dwarvern magic, or could be completely separate.
How I see them acting is a magic-user uses magic while in combat. Being context-sensitive, the magic may unleash fire around the wizard. It may raise his dead companions, either as they were or as zombies. Or it may turn his weapon into an iron fluffy wambler, or cause the tree saplings to grow faster that season.
Concentration would affect how strong the magic is, not how likely it is to do what you want, making it mysterious, unpredictable and feared.