Charms can only be Magic.
There are no Rare, Set, Crafted or Unique Charms. Smaller is actually better as far as Charms are concerned, however, some Magic Prefixes and Suffixes are only available on the larger Charms. When using Charms you can really dig yourself into a hole where you cannot pick up any more items. It's best to pick only the best Charms to keep and throw the rest away. As you find better Charms, get rid of older ones.