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Your question: What did Mr. Beaver tell the children about the Witch?
My Answer: Mr. Beaver tells the children that she is not a witch
More Details:
Peter is confused and asks if the Witch is human. Mr. Beaver says she is not – according to him, the Witch is descended from giants on one side and from Adam's first wife Lilith, one of the Jinn (what we'd call genies), on the other.