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The file command is "a file type guesser", that is, a command-line tool that tells you in words what kind of data a file contains. Unlike most GUI systems, command-line UNIX systems - with this program leading the charge - don’t rely on filename extentions to tell you the type of a file, but look at the file’s actual contents. This is, of course, more reliable, but requires a bit of I/O.
Magic implements such a "file type guesser", and wraps it into a GUI for easy use on your Android device.