EDIT:
:rolleyes: But can't you atleast have people who deny this theory?
Also, how do you KNOW the world was created through magic?
Say hello to the http://www.imperial-library.info/mwbooks/monomyth.shtml
While every race has its own personal spin on creation, beneath all the allegory and anology, it's the exact same myth with different names.
Even the http://www.imperial-library.info/obscure_text/tsaesci.shtml and the http://www.imperial-library.info/mwbooks/clanmother.shtml echo the same.
-----
Now, let me say this: I would consider it very possible to have a group of magic-users lambasted by another group for practicing what is seen culturally as "improper magic." Like Daedra worship, or necromancers. Under a cultural view, yes, you could have certain types of magic-users as outcasts from the accepted social practices of that culture. The Dunmer did much the same with worship of the "bad" Daedra and necromancers.
However (and correct me if I'm wrong), I feel that is somewhat different than what you were suggesting, which was magic itself being seen as outlawed. The trouble there is, magic is rooted in virtually everything that goes on in Tamriel. Even the Dwemer, who were the only race to decry magic, still used magic at the core of their working, just calling it a different name. Even the Nords have their Greybeards, who tear things apart with their very voice. Even the Redguards have their Yokudan ancestors, the Ansei, who attack with spirit-swords and can cut the
atomos (and did). The Khajiit in birth are a perfect example of magic, being affected by the Lunar Lattice and taking on multiple forms accordingly. The fact that stasis and change do not bleed into Mundus like a sieve and rip it apart like Oil and Water is due to the Towers (the first Ada-Mantia, White-Gold, Red-Tower, Crystal-Like-Law, Snow-Throat, etc), which is the epitome of magic.
You see, while the Dunmer may have attacked the worshippers of perceived bad Daedra and necromancers, they did it comfortably using magic. Never mind that they themselves still venerate the bad daedra in a way, and they themselves still practice necromancy (binding the dead to guard their tombs), just calling it a different name.