You are Rajinn, and you possess innate magical talent. Your talent has been moulded by your master, nameless as he is, into the field of soul manipulation. To explain souls requires an explanation of Mana first. Mana has many names, life-force, essence, primordium, and these all convey roughly what it is. The powering force of everything in some form or another. Souls are conglomerations of Mana that have developed personality, and in some cases sentience or sapience. Every living thing has a soul, from the smallest insect, all the way to the greatest monster. Some places have so much Mana pushed through them that they develop a soul, such as a wizards tower or a city. Souls themselves manipulate magic around them, most commonly to live, move and think. Most people have very limited ability to use magic, their soul being not quite strong enough to do anything externally. However those with even an ounce more power than needed to function can use Mana to affect almost anything, given time.
Manipulation of souls is generally split up into three categories, Dark, Light and Red. Dark manipulation involves souls that have formed, but have no intelligence themselves, only "personality". This personality generally governs what they can and can't do, and the changing of this personality is the main bulk of the magic school, besides removing the souls from their current location. Light manipulation is much harder, and involves the changing and removal of sentient souls, as well as the fusion of smaller dark souls into a light soul. Red soul manipulation is incredibly difficult as it involves attempting to change or use sentient souls, or create them from Light souls. Artificially created Red souls are no different from naturally formed ones, aside from the potentially erratic and jarring personality of sudden intelligence. Necromancy is the infusion of Light or Red souls into a dead creature, which colours the personality, normally appearing feral and hostile if uncontrolled.
The area around you looks like your home town, at least what you remember of your home town. Except for a few things. One, you don't remember dragons being native to this region, especially fairy dragons. Two, you don't remember mountains anywhere this side of the ocean. And three, perhaps the most jarring one of all, is you don't remember a giant and grey glowing mushroom looming in the distance, which looks to be about a mile tall.
What do you do?
(p.s. all information given is in character, so may conflict with what other people think or have discovered themselves.)