"Mahōtsukai Sally" centers on Sally, a young princess from the magical kingdom of Astoria, who travels to the human world to experience life among ordinary people. Disguised as a human child, she lives with the Yumeno family, posing as their niece. Sally possesses magical abilities, which she uses to solve problems and help those around her, often with the assistance of her two loyal companions, Cab and Patch, who also hail from Astoria. Despite her magical powers, Sally strives to keep her true identity a secret, though her impulsive use of magic frequently leads to humorous and chaotic situations.

The series unfolds episodically, with each episode presenting a new challenge or dilemma that Sally tackles using her magic. These challenges range from helping friends and neighbors with personal issues to confronting minor antagonists who disrupt the peace. While the narrative primarily focuses on lighthearted, everyday scenarios, it occasionally delves into more serious themes, such as the importance of kindness, understanding, and the consequences of one's actions. Sally's adventures often highlight the contrast between the magical and human worlds, emphasizing the value of human relationships and emotions.

Key characters include Sally, whose curiosity and compassion drive much of the story; Cab, a mischievous yet loyal magical bird; and Patch, a timid but resourceful magical rabbit. The Yumeno family, particularly the kind-hearted Yoshie Yumeno, plays a significant role in grounding Sally's experiences in the human world. Recurring antagonists, such as the bumbling witch Nylon and her assistant, provide comedic conflict, while other magical beings occasionally visit from Astoria, adding depth to the world-building.

The narrative maintains a balance between episodic storytelling and overarching themes of friendship, responsibility, and the joy of discovery. Sally's journey is one of growth, as she learns to navigate the complexities of human life while staying true to her magical heritage. The series' charm lies in its blend of whimsical fantasy and relatable, heartfelt moments, making it a timeless exploration of magic and humanity.