@Wikis seems to have the core answer, but it is important to read the books, not just rely on the film. The film stands alone as a fantastic work (it is one of my all time greatest films), but the books have a far darker side to them, which makes a difference in terms of how she it properly understood.
At heart, she seems to be able to do the right thing at the right time. She is a combination of the wish-fulfillment of the children and their parents - firm but fun. So her "powers" seem more like stimulating the childrens imaginations than anything else, but that is, in itself, a significant achievement.