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In any case, knocking someone out is done by hand to hand combat. Punch them repeatedly until they fall to the floor. You have a second or two where they are 'unconscious' to grab items from their inventory.
If you're using the PC version with Tribunal,Bloodmoon, or the patch, then this won't work because mugging was disabled.
Your magicka is dependant entirely on your intelligence score. Depending on what race and star sign you chose, it'll be somewhere between 0.5xintelligence and 2.5xintelligence (I think).
Only way to raise it is by raising your intelligence.