The Magic Map reveals a expansive view of the area around you. It shows an area four times as large as a normal map, and in the Twilight Forest, it will reveal what features lie in the nearby regions.
How does one get one of these maps? The Magic Map is made by surrounding a special item, called the Magic Map Focus, with 8 sheets of Paper.
But where does one obtain one of these magical focuses? For that, you must engage in a little hunting. The focus is made by combining Torchberries, Glowstone Dust and a Raven's Feather. (The recipe is shapeless.)