What does the author mean by the Magi in the story "The Gift of the Magi?"
In O. Henry's story "The Gift of the Magi," the word "magi" has two different meanings. On the surface level, it refers to the "wise men" spoken of in the Gospel of Matthew who came from the East bearing gifts for the infant Jesus (Matthew 2:11). This is a central part of the Christmas story; most people know about the "three kings" and assume that the reason we give gifts at Christmas is because these worshippers brought gifts for the Christ child at the first Christmas.
O. Henry plays off this Christmas tradition in his Christmas story. In his story he tells of Della and Jim, a young newlywed couple who are very much in love. Unfortunately, they don't have enough money to buy Christmas gifts for each other. Della ends up cutting off and selling her long hair to buy a chain for Jim's gold watch, which he has pawned to buy combs for Della's long hair. Henry points out how "foolish" the young lovers are for doing such a thing, but he ends by saying, "Of all who give gifts, these two were the most wise. ... They are the magi." By this he makes a point by way of metaphor that people who give from a heart of self-sacrificing love are the wisest givers--just like the magi of old who traveled a long journey to worship Christ. So Della and Jim, although the narrator initially brands them as fools, are in reality magi--they are wise enough to forget themselves and give from their hearts.