from DoD '84 and 87' (black box)
A mage can never cast a spell when he has physical contact with iron. The reason is not totally known, but some thinks that it has to do with the iron and magnetism. With iron means a metall that entirely or partly consists of iron or steel. A few grams is enough to stop the magic from working. Practically this means that the GM have to decide if a mage is affected by iron or not.
The results of this is that a mage can't cast spells in any form if he wears an armour of iron or is holding a weapon or tool that is made of iron. This doesn't mean that the mage can't use such items, just that he can't use his magic when he do.
Most mages tends to use non-metallic armours, like leather and use weapons made of wood, stone or bone, for example a mace, or staff or something like that. He can also use a bow, but the arrowheads needs to be made of stone which does two points less damage.
Some clarifications was made in:
DoD '91 (green box)
* A mage can't use spells if he is in a room with iron walls or if he sits in a cage of iron.
* A mage can cast spells if he carry iron items that doesn't weigh more than 0,5 kg, but he can't be in direct contact with it.
DoD '23
Conclusion (based on DoD '23 with hints from the earlier versions9Iron has an anti-magical effect, which means that you cannot use magic while in direct contact with iron or steel, except for tiny items.
* A mage can wear leather armour.
* He can use weapons like mace (the head can be made by something other than iron or steel).
* He can be in direct contact with tiny iron or steel objects. This change from earlier versions means that the idiotic thing that some group did iron fillings doesn't work anymore (I remember the debate back then and we never allowed it).
edit: I should that of course a mage could decide to use a sword, but he should think about how his character will live and work, every day. It is easier to select a weapon that he can carry around without a problem, like a staff or a mace with a stone head or something. Then he doesn't have to sheathe the sword when he wants to cast a spell.