Short answers, pulled from the story.
Dutch scientist Christiaan Huygens is considered one of the possible inventors of the magic lantern. The oldest known document about the device is a page of sketches by Huygens, found among documents dated to 1659, showing a skeleton removing its skull. Thomas Walgensten and German instrument makers including Johann Wiesel and Johann Franz Griendel are also associated with early independent development of the technology.
The magic lantern directed light from a source through a small glass slide bearing an image, then through a lens that focused and enlarged the image onto a projection screen. A concave mirror behind the light source directed more light forward to improve brightness. Because a single lens inverts an image, slides were inserted upside down so the projected image appeared correctly oriented.
The magic lantern was in wide use from the 18th century until the mid-20th century. Its popularity began to decline after the introduction of movies in the 1890s, and it was eventually superseded when slide projectors capable of holding many 35 mm photographic slides became widespread during the 1950s.
Phantasmagoria was a form of horror theater that used one or more magic lanterns to project frightening images, especially of ghosts, using rear projection and mobile projectors. The magician Phylidor created what is considered the first true phantasmagoria show in Vienna from 1790 to 1792. Etienne-Gaspard Robert later ran a celebrated Fantasmagorie show in Paris from 1798 to 1803 and patented a mobile Fantascope lantern in 1798.
Yes, magic lanterns could project moving images through a variety of mechanical slide mechanisms. Slipping slides, lever slides, pulley slides, and rackwork mechanisms allowed figures to walk, windmill sails to turn, and planets to orbit. The Choreutoscope, purportedly invented around 1866 by Greenwich engineer John Beale, used intermittent motion and a synchronized shutter, and its mechanism was a key step toward the movie camera and projector.
The first photographic lantern slides were called hyalotypes. They were invented in 1848 in Philadelphia by the German-born brothers Ernst Wilhelm Langenheim and Friedrich Langenheim, and patented in 1850.