I can see hints of magic occurring here and there but can't see it being common in the every day world (fireballs and such). Maybe the magical elements will be saved for absolutely huge moments in the series, like 2 or 3 "holy shit" set-piece moments.
I was always thinking that the more mystical/mythical foreboding would be a little more figurative than literal. I remember one of the theories I had was Chiyou wasn't a manifestation of a demon, but was a human who was a great warrior with his own deadly style of fighting. His legend grew as his story spread ("He's no ordinary man, he's a demon!") and his martial arts style is long lost and is actually the "treasure to revive the Qing dynasty". I remember making a tl;dr topic a while ago, maybe I can dig it up, haha.
EDIT: Found it - the topic doesn't need to be bumped or anything, just if anyone's curious. I'm sure I said stupid things looking back on it. viewtopic.php?f=4&t=39889