WandaVision [Array]'s eighth episode answered so many questions and left us with so many more. Not only did we get the first-ever mention of the Scarlet Witch in the MCU, but we also found out how Marvel is working around Wanda's mutant backstory.
Titled "Previously On," the episode reveals that Wanda has always had magical abilities [1]. It shows her performing a probability hex on the bomb dropped in their Sokovian home, disrupting its mechanisms and keeping it from going off for the two days she and Pietro were trapped. As Agatha explains, Wanda was a "baby witch" whose powers would have eventually dwindled if she hadn't been exposed to the Mind Stone during Hydra's experimentations. The stone gave her a mega boost of power, which transformed her basic witch abilities into what Agatha calls Chaos Magic.
For those who noticed that Agatha is pretty shaken when she makes this revelation, she has a good reason! In the comics, Chaos Magic stems from one of the Elder Gods — powerful, ancient beings who ruled Earth for a million years. Chthon, who became the first dark magician [3] on Earth, creates another dimension, escapes there, and writes the Darkhold, a mysterious and all-powerful book of magic [4], which he leaves behind to physically link his new dimension with Earth. Chthon is bad news, simply put, and the magic he gives people allows them to reshape and manipulate reality on a potentially universe-ending scale. Obviously, that's not power to trifle with.
The origin of Wanda's powers in the comics has been retconned a few times, but her MCU story is pretty similar: she was born with magic that gets amplified by experimentation. In the comics, her powers are given to her by Chthon as a newborn, but in the MCU, it's insinuated that she was born a witch without Chthon involved. When she's exposed to the Mind Stone, it acts as a booster, giving her literal world-shaping powers. That's how she creates Westview and a magical construct of Vision to live in the Hex.
As in the comics, it appears that Wanda is a rare magic-bearer referred to as the Scarlet Witch, and, according to Agatha, they're practically mythical. Despite being centuries older, Agatha is notably wary of Wanda and her magic, but she's also intrigued. Whatever kind of power Wanda has, she's untrained, and Agatha's discovery of her could mean that she'll finally get the proper training to ensure nothing like Westview or Lagos happens again. Maybe we'll finally see the Scarlet Witch make her debut, standing fully in her truth and embracing her powers.