In Absalom, the Varlokkur investigate any crimes conducted using magic. Some spells are illegal per se, which is invisibility and anything that conceals you (misdirection, etc.). Others are treated as weapons, like charm person - they can be used in self defense but not used at will in general. All spells not specifically listed as illegal at a Spell Fete are legal, but keep in mind that cops can find a crime to fit what you're doing if you're being annoying. A fifth level wizard can "cast as they will" - but if they break something it's vandalism, if they threaten someone or cause a panic it's assault. Just like here in Texas you can open carry a weapon, but the second you point it at someone or brandish it threateningly you get go have a nap.
Is it the same in other countries? No of course not, the hundreds of other countries and cities and cultures have differing approaches to magic. It's too broad to cover them all here.