system
Given the following post, respond as if you're commenting on Reddit:
human
[LoTR] What would the full extent of Gandalf's powers look like? What exactly is he capable of?

excuse my ignorance but isn't he the, or one of, most powerful beings on middle earth.  He is only able to use these underwhelming abilities because the valar(?) forbid it?
gpt
Gandalf as you know Gandalf showed his capabilities against Durin's Bane (the Balrog), because he had no choice. The thing is, magic in Middle Earth is generally not flashy or spectacular in the same way other universes treat it. Magic is literally divine energy, Eru's (God) will at work. Such an energy CAN, and did, sink continents and literally reshape the world, but for the most part it's subtle and "natural". As in, most magic can be seen in every day things, like the sun rising or life growing and spreading. Gandalf can tap into these things and make them "better". Think about (in the film) when Gandalf put a crystal on his staff and blew into it, treating it like a small fire, before it illuminated the caves into Moria. That's the kind of magic he does. 

Gandalf wasn't always an old man walking the earth. He was created as Olórin, a "lesser angel", but still very wise. Olórin would have likely been spectacularly "powerful" (though not on the level of Sauron), but he knew better than the flaunt it. It's why, when he came to Middle Earth with the other Istari, he was singled out and given one of the three great rings. His "real power" is actually his great wisdom, and the desire to travel and learn more to add to said great wisdom. Above all else, that's why he alone accomplished his mission.