This is a common term used by the public to indicate an ornament worn on a necklace or bracelet for decoration or adornment or for a vague wish for "good luck" or as a declaration of religion, such as a pentacle worn by some Pagans, or a Yod HaShem ("hand of God") or a Mogain Dovid (star of David) worn by Jews.
Charms are believed to be originally worn in ancient Egypt, usually in the form of a necklaces, as a defense, amulet or pentacle, form sickness and psychic attacks. Charms, amulets or pentacles, became popular among the Greeks and Hebrews (the Pharisaic sects) as protection from harm. In the Dark Ages, charms became very popular and were used as a declaration of faith among Jews, Muslims, and Christians.
To one with magical powers, a charm is a material synonym for a "spell", specifically an amulet or a talisman, depending on the change or outcome that a Crafter intends to bring about.