1. It can do damn near anything, and spells can also have words added in a certain way so that a caster can achieve more specific effects.
2. It can't restore an ability to use magic (duh), create or destroy energy or anything in the real world, or be cast without some sort of effect (which can be good or bad for the caster and/or anyone else in the area).
3. Depending on the spell, the cost is usually caster's physical or mental energy, and each spell cast decreases the chances that the next spell will work normally. This depends on the time passed between spells, and 24 hours must pass for a spell to have the highest chance of working properly again. Some spells require energy from an outside source and/or more than one.
4. Spells can physically and mentally stress the caster temporarily, but can cause obvious and/or permanent damage to them (combat spells generally cause physical injury when they backfire and that injury is based on what it does, and spells that alter the physical world or the minds of others can eventually lead to insanity).
Other questions to ask, which may not all be important for a story aside from maybe being interesting to think about:
A. Where does magic come from? Does it come from a deity's blessing? Are people born with it? Is magic an entity unto itself? Does anyone know?
My answer: Magic is its own thing entirely, and with spells, the caster must "call upon" this entity to grant them aid. In return, it usually drains the caster's mental and/or physical energy so it can be used in the spell.
B. If magic can backfire, why and how would it do that? What can happen when magic backfires? Does someone/something decide that?
My answer: Spells can backfire, and the magic itself decides that based on its current mood and how experienced the caster is with the kind of spell being used (how often it's used, whether or not the caster knows what can/will happen, etc.), and how much it likes you. In a sense, it decides if it backfires based on how "worthy" it thinks the caster is.
B-A. If magic is its own entity or a deity blesses the caster with it, do they get to decide that for you? Can they choose whether or not it backfires? Can they choose how much it backfires? Will they take their anger out on the user if they're having a bad day and/or if they're specifically annoyed with the caster?
My answer: Sometimes, the magic will decide to cause the caster's spells to backfire just because it's annoyed with them. Other times, it's just sick of dealing with everyone's BS. If a spell isn't potentially harmful, it may slightly alter the effects in a playful way if it likes you and if it just wants to pick on you.
C. What other senses are affected when using magic? Depth perception? Taste? Balance? Hearing? General awareness? They don't just have to affect the 5 senses you learn about in elementary school.
My answer: Haven't decided this one or the rest. I probably won't update this post if I do figure them out either, honestly. Not all of these ones I added have to be answered anyway, so there's that. ;v;"
D. If potions are a thing in your universe, does anything have to be strained from a potion after making it? If you use tough plant matter, is there anything physical left behind that has to be removed like when cooking certain foods?
E. With certain forms of magic, how long does it take for something to wear off? How long does it take for the user to be able use magic again, if they pass out or otherwise end up unable to use it? For those who permanently lose an ability to use magic, can they still be affected by magical items? How will that loss affect them mentally?