Nyssa al Ghul is back in Starling City and she's determined to avenge Sara's death.
"The Magician" feels like the first real step forward for season three, with the investigation into Sara's death back in the spotlight. Nyssa al Ghul's appearance produces new leads into Sara's killer, and the Arrow team is back on the case. Nyssa reveals that Sara was sent to Starling City to confirm rumors that Malcolm Merlyn, The Magician, was in the city. Oliver's mother, Moira, told The League that Merlyn was still alive in season two, using specter of Ra's al Ghul to keep Merlyn away from her family. Her knowledge of the League and the fact that Merlyn is alive are yet another secret that Moira kept from Oliver and Thea.
Deception is the common thread on Arrow this week. Thea is likely lying about who is bankrolling her reopening of Verdant, and she continues to lie to Oliver about how she spent the last six months. I do like the symbolism of Thea rebuilding her club and herself right above where the Arrow first set up his den, though. Laurel continues to lie to her father about Sara's death, Nyssa decides to lie to Quentin to cover Laurel's lies, and Quentin is revealed to have lied by omission about having met with Sara a few weeks ago. Oliver is slowly telling Thea more of the truth, but only when it is convenient to him. He still hasn't told his sister nearly the whole truth about his life.
With a little help from Quentin Lance, Laurel, Oliver, and Nyssa track down Sara's last lead on Malcolm Merlyn. The team heads to a local monastery, established by a close friend of Merlyn, hoping to find his hiding place. Merlyn is there, hiding in plain sight, and he narrowly escapes Nyssa's attacks, fleeing the scene. Oliver tags Merlyn with a tracking arrow, laced with nanobots developed by Felicity Smoak. We get the first jab at the rest of the team's technological skills (as predicted) when Diggle uses Felicity's program to track Merlyn. Of the program, Oliver says, "[Felicity] told me an idiot could run it." Laurel and Nyssa are convinced that Merlyn must be Sara's killer, but Oliver has his doubts, and that pushes him into conflict with both of them.
The differences between the morality of Nyssa, Malcolm, and Oliver are at the core of this episode, and it's nice to see moral questions given some time to breathe again on Arrow. Oliver's commitment to not killing is challenged again in "The Magician", with even Diggle wondering if Malcolm Merlyn deserves death whether or not his was the hand that sent three arrows into Sara's chest.
Felicity and Ray Palmer are thankfully absent from this episode. Felicity's absence is partly due to her appearance this week over on the spin-off series The Flash, but I'll take the victories I can get. It's nice to see the writers are willing to do episodes where not every established character needs a part. Several episodes this season have felt like too many arrows in a quiver, and "The Magician" is the first that feels like it has its pacing right.