Is it "Maho" or "Mahou"?
 

Mahou/Maho=Magic

I've seen it spelled both ways, but which one is the right way to spell it?

Arigatogozaimasu! XD

魔法(まほう) is how it is written in japanese. When you spell them out in alphabets, that would be MAHOU, though in many cases, it is simply spelled as MAHO.

There really isn't a "right way" to spell Japanese words in English. There are a few systems, like ones that spell　仕事 SHIGOTO or SIGOTO or　つなみ TSUNAMI or TUNAMI.

If u write Maho , there should be a bar place above the "o"

so its mahou?

like tokyo is toukyou?

Tōkyō is the correct one, ō=ou

Just as what MMM said, there is no correct way to spell it in English. It is just how you interpret the japanese word and spell it out in English as you see fit.

If you don't know japanese, it makes no difference to you whether it is spelled as Tokyo, Toukyou or Tōkyō. For as long as you understand them in your own way, then it is fine. After all, they all sound almost the same.

However, if you know japanese and you wrote 魔法 as まほ instead of まほう, then it is incorrect.

Really depends on the way you want to write it, I'd probably write it the way it sounds, so it isn't misinterpreted- that being mahoo.

I mean if u use Tokyo , you cant type the kanji..　ときょ。。　東京（とうきょう）
I dont write 漢字　Often、I type them instead , so its important to make clear