Magic Gems are quite small and come in a variety of colors and shapes depending on which Jewelpet it was formed with. For example, Ruby's Magic Gems are always red and shaped like hearts, and Sapphie's are always blue and shaped like stars.
Magic Gems were items Jewelina announced to the Jewelpets in episode 1 for them to collect for the Jewel Box. She says that if all Magic Gems are collected, something very nice would happen. Ruby was the first one to form a Magic Gem, forming it with Chiari. When the Jewel Box expanded, more Magic Gems had to be made.