The Magic Lever was introduced by Seiko in 1959 with the purpose of improving the efficiency of the winding system. In other words, it shortens the winding period and allows for a longer power reserve. In comparison to a Swiss style winding system, the Magic Lever is minimalist and requires far fewer parts to accomplish the same task.
The video below shows the Seiko Magic Lever in action.
In Seiko’s own words:
“One key point of the Magic Lever is that its shaft is on an eccentric pin that is outside of the central shaft of the rotor. Therefore, the Magic Lever itself always moves up or down regardless of whether the rotor turns clockwise or anticlockwise.” –source
You may also see the Magic Lever system referred to as the Pawl Lever. For example, the official Seiko tech sheets for the caliber NH3 series lists this as part 0831 183.
This video also does an excellent job in explaining how the system works:
“This is the autowinding system of seiko watches. It is known as the “magic lever system” since it was built according to the structure of the train wheel system. With this configuration, it allows the ratchet wheel to rotate in a desired direction no matter which direction the oscillating weight is turned. Such design greatly enhances the efficiency of energy saving that is done by converting the kinetic energy from human’s moving to the potential energy storing in the mainspring inside the watch.”
Orient watches also use Seiko’s Magic Lever winding system. The video below does a great job in explaining the differences between this system and a Swiss style winding mechanism: