The magic smoke theory is a running in joke originating among electrical engineers and technicians before more rescently being adopted by computer programmers.
According to the magic smoke theory, there is a little bit of magic smoke in every integrated circuit, resistor, transistor, and all other electronic components and it is the magic smoke which makes the device work. The magic smoke is put in at the factory when the device is manufactured. Unfortunately, however, it sometimes can come out under such catastrophic circumstances as high voltages or excessive current being fed to the part. The proof of the theory is, of course, that once the magic smoke has been seen to leave the component, it no longer works, thus demonstrating that it must have been the smoke that made it work in the first place.
A variant on the magic smoke theory is the idea that the magic smoke also travels through wires, and in the event that wires get too hot, they too will leak some magic smoke, again making the circuit no longer work.
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