A low-magic setting concept

Low-magic settings take several different forms depending on the world-building of the individual game-master/group - magic can be rare, can be a resource, or limited to a very few individuals.  I realized that the campaign I started a while ago had no magic users - characters or NPCs (at least as far as we've played so far). So why not, as a game experiment, keep it that way?

I'm toying with a political variant (still somewhat nebulous, so using this entry to air out some ideas).  Some generations ago, arcane magicians, through war, treachery, experimentation, dictatorship, erc. nearly destroyed the world's civilization.  Only through the efforts of divine inquisitors and/or magekiller knights, did the magical war/ reign of terror/ terrible mistake, come to an end.

Setup:  Arcane magic rare and persecuted.  Divine magic holds sway, with the support of the general populace.

I haven't eliminated magic - but just focused it to a primary form.  Don't worry, I'm not planning on overrunning the place with proselytizing warrior priests and stuck up paladins.  Divine favor is still a rare and precious thing.  Not just anyone can cleric up.  It is a calling, after all.

So - our setting -

Divine acolytes wait at city gates with the watch, detect magic-ing travelers like a medieval TSA.  Arcane users are captured and potentially disappeared.  Magic items are rare and can be confiscated, with their bearers fined or jailed, unless they can provide verifiable documentation that the magical device or weapon is an artifact, pre-dating the Event.  Inquisitors and Magekillers still patrol the hinterlands, rooting out the arcane.

Potions can be based on divine magic (still keeping the Cure Light Wounds after all...) or alchemical based, with potential side-effects and failures...

Perhaps the magic-resistant races are more prevalent - the dwarves and halflings.  The magic-affinity elves -  'extinct,' or rare, or pushed into distant lands insulated from the pogroms and purges.

Druids, if used, are rare and stick to remote and primitive areas.  They will avoid urban areas (they are druids, after all), entering settlements larger than villages only under rare or dire circumstances.

What alternatives to magic might there be?  Alchemy, primitive tech?

(if you absolutely have to use bards - limit out spell sets, base their powers on performance, psychology, suggestion and hypnotism)

Where are the magic users?  As a persecuted group - they are in hiding.  Often in a distant location, or perhaps in plain sight.  Historical precedents:  Early Christians or other persecuted groups collecting for secret meetings in catacombs, Crypto-Jews hiding their faith through feigned allegiance to another religion.  The Jedis in Ep. 6-8...heh.  The arcane castes are hidden under layers of secret codes and languages, perhaps illusory masking magics, and stealth.

And certainly magic is not absent from the world, as Chaos and rebels have no qualms about using it, as they are not subject to such legal prohibitions.

So how might this work out in game play for players and plots?

PCs:
Want to play a mage?  How do you hide, what is your cover story?  Are you disguised as a torchbearer, or do you multi-class with a spellbook hidden in a quiver or false oil flask?
Are the members of your party trustworthy, or is there the chance of betrayal, what is the risk to a party traveling with a known (or unknown) mage?
Do you have a magic item, either an artifact or new?  Do you have believable documentation for it or do you stash your irreplaceable Bracers of Defense outside of town, hoping that no one spotted you secreting them away?
How do the PCs feel about mages?  Hostile, sympathetic, ambivalent?
What do they do if a mage colleague is captured or revealed?

Plothooks:
PCs tasked to hunt mages, or reveal one among them?
PCs contacted by a mage seeking asylum, or requiring an escort to meet a cell.
PCs to aid a mage in gathering or rerecording a contraband item - perhaps relic or component.
Mage PC needs training or to seek mentor.
A corrupt "cleric" (crypto-mage) is using magic or betraying his fellows.

... and somewhere, hidden, powerful mages plot to retake their place in the word.