You move the main character (magician) with the d-pad, and the other party members as you would in an RTS with the stylus (drawing a box around them and then pointing them where to go). Battle is done by pointing party members at enemies so they fight them and also, with the main character (who seems to be the only player capable of magic in the demo), by drawing spells on the bottom screen (like Pac Pix) and then pointing them in the right direction. Apparently you will be able to mix up spell drawings to create combos.
That's what I picked up from my short time with the TGS demo. It was quite fun and it sounds like there could be a lot of spells and combos to learn in the final version.