If you look at your character's stats, you'll see a "Lore" rating. Each person has one. It is generated on a given number of points per level, differing by class. I believe that Thieves get 3 points/level, wizards get 5(?), and Bards get...maybe 7?...
This number is factored somehow for a higher INT/WIS to come up with a Lore rating. Each magical item you come across in the game has a Lore rating. If the character trying to identify it has a Lore rating that is the same as or higher than the item's Lore number, then he/she will identify it. If not, then you've got to use a spell/glasses, or find someone who can identify it.
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