Way back when people first landed on Blugar’s World, demons introduced humans to the use of magic, and for a while the two were assumed to be paired – you can’t cast magic without being pledged to a demon. Clerical magic was seen as holy, magic was seen as evil. Fundamentalist Umoians still prescribe to this point of view.
The turning point were some mages who learned magic from “good” dragons, and showed that no Umoian could prove they were evil. They demonstrated it was a skill which could be taught, although some people could learn it faster and easier than others. From a few simple spells, humans studying magic were able to expand the knowledge to shelves of spells. As a teachable skill, it was regulated much like guns are today – penalties for using them offensively in town, tolerated if used in self defense, using in crime accentuates the penalty. Groups such as the Circle take on mages who abuse magic. 60% of third generation or later planet born people are “mageborn”, while fewer than 25% new arrivals are mageborn.
The worst example of abuse happened in Jnda. A mage with expertise in necromancy raised an army of zombies, and the army grew as it infected new victims. When the army was finally destroyed, and the mage destroyed, the leaders of Jnda made all magic illegal. A couple of the leaders had mental talents which lead to the defeat of their enemy, and they held these Psi powers in high esteem. Centuries have passed, and in Jnda psis are common, respected, and hold places of honor.
Psis in the empire were known, and some even tried to train others in their skills, but that rarely worked. The Empire and Jnda had some border wars, and empire mages were mentally turned on the battlefield to attack their own troops. Jnda’s psis were too powerful compared to empire psis. The people now knew the enemy was better in psi skills. Then that shifted to people became more fearful of known psis who could be spies for Jnda. There were witch hunts, burnings, and hangings. Psi skills in the empire disappeared from public view about 700 years ago. The average man on the street would see any visible evidence of psi powers (like flying) and assume they were seeing magic. Town watches on a small town might do the same. In larger cities or where the ruler is paranoid, magic powers are monitored, and magic-like manifestations without magic auras would raise a danger flag. There are stories and rumors about the Jnda Ninjas, a group trained in spying and assassination with physical and mental skills.
Psi talent (almost always undeveloped) is most often seen in new arrivals and historically more recently, but even then less than 10%. The gene may be recessive, and having two parents with talent is most likely to result in talented children. Some say it is bred for in Jnda, and there is no known equivalent effort in the Empire.
It is known that psis are vulnerable to the presence of demons and some other extra planar creatures. This effect is not well understood, but it is rumored that the Imperial Palace in Katmandu has caged demons to prevent Jnda ninjas from entering.