@friendlycoffee
Alright, so hopping back a step then:
Maybe there are regulations from the government, but most people aren't aware of magic still. So, a secret department whose job it is to regulate magic or eliminate its threats.
Maybe something has happened recently where people are disappearing?
Prophecy based? Maybe even a false prophecy or incorrectly translated. Not bringing of the end of the world necessarily, but could be. Could be that magic people are flocking to this city to witness the fulfilment of prophecy and it's just causing problems. The whole thing is a build up for a prophecy that isn't right. Could be our story is set right in the middle of the public discovering magic.
Oh, are magic users randomly gifted or is it a familial trait? Passed down and all.
Just blabbering whatever I could think of.
I really like the idea of some kind of prophecy drawing everyone to the same city, and causing problems because having so many different people with different magic in one place is just unstable, and the prophecy itself not really leading anywhere. It could be that the prophecy was made a couple of years ago and caused a whole lot of people to gather... and then nothing really happened so they're just kind of waiting around, getting bored, questioning the validity of the prophecy in the first place, and beginning clash and cause trouble now that they're frustrated.
This is a nightmare for the government sector wanting to keep magic under wraps, and they've kind of come to the conclusion that it's getting harder and harder to cover up and they're probably just going to have to reveal it all to the world.
If you want to base it around disappearances it could be that magic users/entities are disappearing, and that they're blaming the government sector for wanting to get rid of the troublemakers to try and make things look all nice and tidy when they break the news to the world, and the government sector claims it's probably just them picking off each other for whatever reason, maybe something to do with the prophecy.
Then we could maybe follow some people trying to find out what's going on, possibly to protect themselves, possibly because it's their job, possibly because they want to help, or possibly just because they're bored. Would that sound interesting?
As for magic users, I was thinking that maybe the trait for magic is most likely found in families, but the specific type often differs because it's often tied to the way people think (you'd have to be very neat and mathematical to be a mage, someone who prefers specifics, which is different from witches who handle things more emotively...), although people who are related often think similarly, so there's that. I think it might occasionally pop up randomly though, or as a throw back gene. However I think if it wasn't usually found in families it would be much easier to discover the existence of magic, so other cases might be rare.
It'd be purely genetic for the fae, but other creatures might acquire abilities regardless of family. Think werewolves as an obvious example.
