
FrostFox |

Got into an argument with my friends who thought that because the rules don't say possession of a magic item is necessary for activation, that it's possible to do so.
Can someone point to me where it might say, affirmatively, that you require or do not require possession of a magic item for activation purposes?
My explanation that it's implied is not satisfactory to them.

avr |

Actually you'll find under specific magic item types activation rules like
Activation: Wands use the spell trigger activation method, so casting a spell from a wand is usually a standard action that doesn't provoke attacks of opportunity. (If the spell being cast has a longer casting time than 1 action, however, it takes that long to cast the spell from a wand.) To activate a wand, a character must hold it in hand (or whatever passes for a hand, for non-humanoid creatures) and point it in the general direction of the target or area. A wand may be used while grappling or while swallowed whole.
Wondrous items not worn in one of the magic item slots are called “slotless” wondrous items. Sometimes these items take the form of trinkets, like figurines of wondrous power. Other times they are larger items, such as the carpet of flying. Typically the possession of such an item is enough to gain its benefit, but sometimes one must manipulate and activate the item.

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So wands are covered, which should also be satisfactory for staffs and rods. The truth is that it is up to GM discreason, the item, and common sense.
So, some items are explicit, like some intelligent magic weapons have the ability to cast spells, but only while unsheathed and in someone's hand.
Obviously you need to drink a potion a potion to use it, but it doesn't have to be in your possession (a friend can pour it down your throat)
Some items, like an ancient enchanted alter, activate if you are near them. After all, how do you possess an entire granite Alter affixed to the ground?
Technically I suppose you don't need a scroll in your possession to use it, you just need to be able to read it, so your friend could hold up a psychic scroll for you while your hands are full and you could read it, as long as they were adjacent.
As for other items, look for the term 'bearer' or 'wearer.' That's the proof you need to say that they need to be holding on to the item in question.

Rub-Eta |
Tecnaclly, you don't have to possess a scroll to use it. There's nothing stating that you need to hold it. But you need to decipher it before you can read it. And you need to be able to see and read the writing on the scroll to attempt to use it. That's enough to stop most cases of casting from scrolls that you don't possess yourself.
Honestly, it's extremely silly to argue that you can use any magic item, even if someone else is holding it and not you. "I activate the BBEG's staff of fireballs against himself!" How about the enemy expending all the CLW-wand charges?

FrostFox |

One of the specific items in question were the feather tokens, or the instant fortress. If speaking the command words is sufficient, anyone that knows the command words could activate them at any time regardless of whether or not they hold them.

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It is pretty heavily implied that command words can only be used to activate items by their owners. Check 'command word' on the core rulebook.
Command Word: If no activation method is suggested either in the magic item description or by the nature of the item, assume that a command word is needed to activate it. Command word activation means that a character speaks the word and the item activates. No other special knowledge is needed.
A command word can be a real word, but when this is the case, the holder of the item runs the risk of activating the item accidentally by speaking the word in normal conversation. More often, the command word is some seemingly nonsensical word, or a word or phrase from an ancient language no longer in common use. Activating a command word magic item is a standard action and does not provoke attacks of opportunity.
That seems to indicate that only the bearer can activate command word items. And, if you are the GM, you can just make a 'rules clarification' saying that explicitly. If your players whine and complain, I dunno, make a diviner wizard figure out all your party's feather token command words and activate them in a battle, costing them a bunch of resources. Sword cuts both ways.