The entire story of Excalibur is based on three things which intertwine with each other. Those three things are magic, power and fate. Excalibur would not exist with out the magic of the all-powerful Merlin; the town of Camelot would never been created with out the power and strength of Arthur and his men ; and furthermore with out fate Arthur would have never have pulled the sword from the stone. With out these three things to be the center themes, there would be no story of Excalibur.
In the movie, "Excalibur" a lot of magical incidents took place, mostly done by Merlin. If not for Merlin, Arthur wouldn't had ever been alive. Merlin is the one that conjoured up "the dragons breath" which allowed Uther to change his own identity in order to have sex with Tintagil's wife , and thus Arthur was born. Excalibur, Uther's sword, was created solely by some sort of magical forces.
Merlin uses his magic through out the entire movie. Merlin would never use his magic against his own king, only for the purpose of helping him. Even when Merlin was tricked and then frozen, he was still able to use his magic to become a dream and help Arthur win his battle against Mordred. Just to prove Merlin's intelligence, he used his own mind to trick Morgana into using all of her magic and created the fog which later was used to defeat her own son.
The main source or power in "Excalibur" was indeed Excalibur itself. The king wasn't very strong without this special sword which aided him much throughout his rein. With first being King Uther's and then stuck in a stone upon his death for only his blood to take out, then it became Arthur's. With out Excalibur there...