The term 'GIFT of the MAGI' is a reference to a short story by O. Henry, which tells the story of a young couple who are deeply in love but have very little money. The couple each make a sacrifice to buy a GIFT for the other, with the man buying a watch chain and the woman selling her hair to buy a comb for her husband. The crossword solution for the term 'GIFT OF THE MAGI' is FOB, which stands for 'Fob watch', a type of pocket watch that was popular in the early 20th century.