You have come into the possession of a Keyblade, a weapon with the power to open and close almost any lock or door, from magical seals, to a person's Heart, to even gates between worlds, as long as you can locate and reach it. Though it may appear quite impractical, the magic within allows it to function effectively despite how unwieldy it looks, as well as allowing it to teleport back to your hand at will.
You start with the Keychain for the Kingdom Key, a handful of basic spells such as Fire, Cure or Reflect, and magical power roughly on par with Sora near the start of his first adventure. Though you can expand your physical and magical abilities with simple training, new Keychains are typically only obtained by undergoing significant events, forming strong bonds with others, or through Synthesis.