From what I understand, it's a clinical term to describe a variety of nonscientific and at times irrational beliefs (getting some of this from google). An example would be me thinking that my ex was controlling my thoughts through my dreams. A belief in the paranormal could be considered 'magical thinking', but they should look at the context. Like...if I'm part of a religion that believes certain things, then those beliefs shouldn't constitute magical thinking unless they were truly bizarre, I think? Sorry if I got any of that wrong.