Your initial question asking about “formalism” in Villa’s poem didn’t really make sense to me, so I changed the question to read “What are the formal elements in ‘Lyric 17’ (‘First, a poem must be magical’) by Jose Garcia Villa?” I hope that I didn’t change the meaning of your question too much.
There are a number of formal (or structural) elements in the poem. The most obvious formal elements are meter and rhyme. The meter is fairly regular, with three stressed syllables per line. See, for example, “It must be slender as a bell” and “And it must hold fire as well.” There’s also a strong tendency toward iambic feet (pairings of unstressed and stressed syllabus), making the general meter of the poem iambic trimeter. The rhyme scheme is even more regular, with rhyming couplets (AA, BB, CC, etc.) throughout the poem. Other formal elements include the frequent, patterned repetition of words and phrases at the beginning of lines. One such pattern begins in lines 3 and 4: one line begins with “It must…” and the follow-up line begins with “And…”.
Other poetic elements worth mentioning are alliteration (such as the repeated “d” sound at the beginning of “dove and deer”) as well as simile (e.g. “slender as a bell” or “like a rose”) and metaphor (e.g. “it must hold fire as well”).
The links given below may lead you to useful information.
Because "Lyric 17" contains fourteen lines, it can be considered a sonnet, though not an English or Italian form. Jose Garcia Villa was a twentieth-century poet who combined progressive techniques with formalism.
Like a sonnet, the poem has a regular rhyme scheme; in this case it is seven rhymed couplets, and the meter is mostly iambic trimeter.
Sonnets deliver an argument, and "Lyric 17" does just that, offering the speaker's ideas about what a poem "must be." It is a lyric poem.
The poem contains formal techniques such as simile ("musical as a seagull"), personification ("it must kneel like a rose"), imagery ("The luminance of dove and deer"), and the sound effects of assonance, ("It must be slender as a bell"), consonance ("Then musical as a seagull") and alliteration ("dove and deer").
"Lyric 17" also utilizes the technique of enjambment; a line will run into the next to complete the syntax. Here is an example:
"It must be able to hear
The luminance of dove and deer."