Magic Council

The Magic Council is the ruling body of the world of Magic.

Overview
As the main ruling body of the entire Magic world, the Council possesses almost utmost control over it, acting as a leading government of sort. The Council rules all of the legal guilds scattered troughout Fiore, overseeing them and keeping them in check, and they are responsible for the events caused by Mages, also possessing the right to punish contravener Mages and to confiscate Magical artifacts which could potentially cause large-scale damage (as shown from the Lullaby being in their hands after the Eisenwald incident). Among the things prohibited by the Magic Council is the use of Magic for assassination, something which, if perpetrated, could lead the Council to oust the contravener's guild (as shown with "Shinigami" Erigor and the Eisenwald guild). Heavy incidents happening in the Magic world might inflict serious damage to the Council's reputation, going as far as to cause the dismissal of one or more of its members. The Council has the right to apprehend Mages charged with crimes anytime, with their messengers being highly respected.

Being essentially the overseers of guilds, they do not hold the Fairy Tail Guild, mainly Natsu Dragneel, in high regard due to their idiocy and property damaging tactics. Due to the events of the Tower of Heaven arc, where two members were revealed to as traitors, several council members have left. They have since been replaced as of the Oración Seis arc. The Council has nine members at a time, along with a chairman that makes the final decisions.

Sadly, since their humiliating defeat to Jellal and Ultear, the Magic Council disbanded until a personal request by the King of Fiore to be reformed. The new Magic Council is stricter than the old one and very single-minded and perhaps heavy handed in it's goal to remove all of the Dark Guilds.

Rune Knights
A subdivision within the council, Rune Knights are the Council's army. Their job is to enforce the council's ideals of justice and investigate the matters of the Council. With the new Council, they have become increasingly strict.

Trivia

 * The musical theme of the Council in the anime is an instrumental version of the famous Aria "La Habanera" from George Bizet's Opera "Carmen".
 * In the anime the meeting room is a giant Magic circle that the council members stand around, but in the manga it's a circular table with chairs.