Some armies have wizards which are also characters, such as Vampires in the Undead army. Where this is the case players are permitted to take the models either as wizards of the equivalent level or as characters. An army's General can sometimes have magic powers, as with the Undead, in which case the model is considered to be the General and so can always be chosen.
Spell casting daemons can only have their magic powers if the player qualifies for a wizard of the appropriate level. If the player does not qualify in this way then the daemons can still be included in the army but may not cast spells.
Special Characters
In a campaign it is often a good idea to put special characters aside and let your own characters develop as the campaign progresses. The presence of Nagash Supreme Lord of the Undead in your campaign may seem a little strange and will certainly affect the progress of the army!
If players wish to include special characters then models can only be included if the player holds sufficient territory to qualify for the character and the magic items he carries. If a special character has a magic level he qualifies as a wizard, although in the case of the Undead, a special character with the ability to cast spells can qualify as a wizard, a character or possibly as the General.