Don't encourage your kids to conjure, raise the dead, predict the future (In Deut 18, God indicates he's sending a prophet... but He also commanded, in Deut 13:1, not to listen to such people. And prophets are notoriously difficult to tell apart from soothsayers. But anyway...), talk to the dead and so on. But you skipped the context of those instructions, which was, don't be like the Ammonites and Moabites. Who were institutionally corrupt, and as adults worshiped and embraced the arcane, and rejected God.
The question is, does waving a toy wand, or shooting at zombies in a computer game, talking to a departed relative while paying your respects at the graveside and so on, qualify as behavior of the kind that the Ammonites and Moabites would've encouraged?
And that depends on how literally you take the Bible, AND how you interpret the rest of the Bible.
I know some Christians who are so phobic about sinning and take Deuteronomy so seriously that they won't use any financial services on the basis that they are all tainted by people predicting the future (derivatives trading), spread betting, usury, and who knows what else... and they've even looked seriously at Sha'ria banks! To my mind this is a bit like an arachnophobe running into the road to avoid a spider. Clearly they've had a logic bypass.
Play is play as far as kids are concerned, and this is explained in the Bible. Corinthians 13: "When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things."
Kids play at being doctors and nurses but it doesn't indicate that they will want to pursue any kind of career in medicine. How many Thomas the Tank Engine fans show a real interest in being engine drivers when they grow up?
How many kids who play at wizards and witches leave school with a serious intention to study the occult? When the Bible speaks of sorcery, it is talking about THOSE kinds of activities - a genuine, earnest and ADULT interest in the occult, not some kid waving a stick around pretending he's Harry Potter.
Many Liberals think that playing soldiers or Cowboys and Indians represents (from my experience) one or more of the following: sadism, masochism, cultural imperialism, racism, gun fetishism of the Pyle-from-"Full Metal Jacket" variety, and other things too ludicrous to mention. So, they don't want their kids playing with guns. So they're pro-gun-control. And so on. How can you be sure you're not making something out of nothing, like they do?