The Magic Sword, possibly called Dyrnwyn, is a magical artifact.
This Magic Sword was wielded by the noble King Gwydion in days of yore, but was taken to his literal grave by the ancient monarch of Prydain. Later, in the middle of the Dark Ages, it was found in Gwydion's hidden tomb beneath his castle by the farm-boy Taran and his future girlfriend Princess Eilonwy. Taran managed to use it to escape from the castle (which had fallen under the control of the Horned King), but later gave it up, along with his dreams of being a great warrior, to the Witches of Morva, who presumably hoarded it ever since.
The Sword glows with magical light whenever used in combat, infused with mystical energy that makes it capable of cutting through practically anything. The Sword holds fighting skills all its own, floating up and fencing on its own power if its wielder becomes incapacitated, and guiding his movements otherwise — which was a priceless help to the rather incompetent fencer that was Taran.
Behind the scenes
The Magic Sword was only ever seen in the 1985 film The Black Cauldron.
The Magic Sword is based on the enchanted sword Dyrnwyn from the original Chronicles of Prydain novels, although the books' Dyrnwyn is somewhat different, being blackened from the sins of a past wielder. Far from aiding an incompetent swordsman like the Disney sword does Taran, the books' Dyrnwyn actively resists attempts by any but the worthy to wield it, under pain of instant death.