Magic isn't a damage type implemented into the game. The only ones that work are
"Magic" is indeed a damage type implemented in the game, and the OP is correct in that it only affects magic armor, not vitality. It is equivalent to Acid, or "Corrosive" damage, that only affects physical armor.
Ironically, the only skills that deal "magic" damage right now are Gag Order, Chlorofoam, and Flay Skin (assuming you don't count the Suffocating from Vacuum Touch / Aura).