To simply put it this way, Chronopolis was right about the brain thing. It would have happened regardless, but the Flame significantly sped the process up, creating "flawed creatures"--according to the Reptites, who I honestly believe are not credible due to their bias against humans. The difference between those in Zeal, and the Earthbound is likely a difference in exposure, or proximity.
Think about it, once it was discovered how powerful this object was, it would likely become a well-guarded treasure. The tribe that held the Flame would probably have been the one to eventually become Zeal--the CT equivalent of some legends of Atlantis--Which is where 1 of 2 things would probably account for magic.
Exposure
Zeal held the Frozen Flame, and once the Mammon Machine was built, it channeled more of the same energy. This energy may have fueled Magic within its citizens once absorbed by the radiating energies. This would also account for certain people (Magus) having their power permanently drained by Lavos.
Proximity
Since the Flame was kept thousands of miles above ground in the kingdom, the Zealians were far closer to it. Perhaps everybody had the ability to use magic, but only those near the flame could use it. There are several holes in this theory. As to why Serge and Co can't use magic when they're next to it, and why Magus can still use Magic in 600 A.D.
Of course, feel free to help/kill either of those theories.