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Does Magnus benefit from being in range of the Changeling's -1 to-be-hit bubble? My intepretation is yes, but one of my opponents is saying no (because Magnus is not a Daemon faction or something like that).

Thanks.

The changeling doesn't make a requirement on the faction.

That's what I thought.

Yep, its all about keywords, nothing to do with factions. Everything that has both the Tzeentch and Daemon keywords is affected. This includes Magnus, Maulerfiends, Forgefiends, Heldrakes, and a few other (provided you give them the MoT). On a similar note those latter 3 can also be made Thousand Sons legion and therefore benefit from both Magnus and the Changelings auras simultaneously.

Magnus is affected by the Changeling

But here is the argument for why he might not:
-Changeling affects all <Tzeentch><Daemons>
-Most <Daemons> have the Daemon have the keyword on their "Faction Keyword" line of their datasheet
-CSM units that are Daemons, like Magnus, have the <Daemon> keyword on their general "Keywords" line and are thus not "Faction: Daemons"

But the rule does not care if your keyword is on the "Faction" line or the general "Keyword" line, which is the only reason some players might think the rule doesn't affect Magnus.
Simple point out that the rule affects <Tzeentch Daemons>, which Magnus undisputedly is.

-

In the "Designers Commentary" they clarify that the only difference between a Faction Keyword and Keyword is for the purposes of Battle-forged Armies. Once you've built your army and the game has begun you can for all intents and purposes treat them as the same thing:

The only real difference is that Faction keywords are
used when building an army;
...
Once the battle has begun, there is
no functional difference between a keyword and a
Faction keyword.

Designer's Commentary link