The history of Harn is presented with the ability to omit the Gods and Magic entirely without changing history.
I'd agree with this, and I get the idea that many have done this in their p-Harns. Historical role-playing, just with a different map.
It is hard to see how magic on Harn can be changed to have always been common and obvious and yet never had any observed effect.
Don't agree at all with this. The amount of canon documentation on the history of Lythia is rather small, and it could easily be argued that magic was not mentioned, either on purpose, or by accident. The same guy that wrote the obviously biased account on the gods wrote the history after all...
Magic could be widespread and obvious, but also have little ability to affect the big items in history. In this theory, there are big spells that could destroy castle gates and win battles, but there's only one person per 100 years that ever learn them, and they aren't interested in doing so. If 99% of spells ever cast are little ones (although many are obvious), then magic may not be important in the long run. We know that battles occur between Kanday and Rethem. We know who won them. We don't know if this was due to superior tactics, better longbows, desertions on the losing side, bribery, divine intervention, battle mages casting illusions, or because the main priest of the losing side was sick that day and therefore unable to offset the winner's prayers.
There is much that has little to no documentation in canon. That can mean it is rare, but also can mean it is so common as to be not worth mentioning, or of so little power it can do nothing. Anyway, just a different viewpoint from one that uses a good amount of magic on Harn without needing to modify anything important.