The Force
Here’s where things get tricky. The Force may be a bit like magic, but the Force as practiced by the Jedi and Sith looks nothing like the magic in Willow. For example, Bavmorda uses her magic to transform Fin Raziel into an animal, and Willow’s magic abilities include making something “disappear” through teleportation. Bavmorda also turns the population of Tir Asleen into stone. In general, spells are cast using magic wands, words, and rituals, not with anything resembling Jedi techniques.
On the other hand, the use of magic in Willow is similar to the use of magic in the Ewok Adventure movies. Ewoks: The Battle for Endor features the evil witch Charal, whose abilities include altering her appearance and transforming herself into a raven. In later works, Charal was retconned into a Nightsister -- a dark side Force Witch. Bavmorda's powers of weather manipulation at the end of Willow resemble the Force abilities of the Nightsisters, and the ruptured blood vessels around her eyes are the same thing that happens to many Nightsisters as a result of using the dark side.
Charal’s power of transformation is not explicitly a Force ability, however, but comes from a mysterious artifact in the form of a ring. This might be the key to reconciling the magic in Willow with the Star Wars universe. Some of the magic in Willow could come from the Force; the Databank entry on Tir Asleen states that its rulers used mind tricks to keep the peace and help their kingdom thrive. However, perhaps some of the magic is poorly understood technology. Cherlindrea’s wand, for example, may be a tool for focusing one’s Force potential, not unlike the Sith amulets used by ancient Sith Lords to focus their dark side powers.
Conclusion
Star Wars is science fiction and Willow is fantasy. At first glance, they seem to have nothing in common. However, the Star Wars movies contain numerous fantasy elements, including ghosts and, arguably, the Force itself. The Expanded Universe features Force abilities and other powers that toe the line between fantasy and science fiction.
Will Lucasilm really make Willow a part of the Star Wars universe? That’s highly unlikely, even if the arguments against including it are not as strong as one might immediately assume. Justifying how Willow and Star Wars might share a universe, however, is still a fun and interesting exercise for fans.