Back through the mists of time when mankind's foot steps first echoed across the land there were a few of those first humans who walked slightly apart. They felt the life of the land and all that was upon it and they sensed some sort of connection to higher spiritual powers. Some could see or feel or sense the lines of power that criss cross the earth and those places where the power tends to pool. Slowly across eons of time and through the rise and fall of countless civilizations these people learned to talk to the Gods and Goddesses that they found, they learned to communicate with Spirits of place, they learned to communicate with their land and to identify the uses for various plants, either for healing or to help bring power and focus. One day, an unknown man or woman reached out with a trembling hand and touched one of the lines of power. The realization that they could use this power to enhance their communication with their deities and use this gift was undoubtedly an awe inspiring revelation. It still is.
At some point, either before or after that great event they also learned that they could call upon the elements to help them with the weather, hunting conditions and many of the problems that crept up on them.
Does it sound like I'm describing Shamanism instead of Witchcraft? It should as both had exactly the same early foundations. So, where and when and how did the separation take place? I can't answer that with absolute assurance but I can take an educated guess. Witchcraft has always been found in the more "civilized" parts of the world, where there were larger populations gathered in one place. It's my belief that as populations grew and the small groups became larger ones and they started settling in one place and building permanent structures the needs of the population began to change. They began to want item that protected them from evil, they wanted something that looked "showy" that involved lots of preparation and special equipment. They found a security in pomp and ceremony rather than the simple things a shaman tends to do. So the village wise woman or man would gather their herbs and place them in specific types of packaging while marking that package with arcane symbols. She or he would chant over them and make gestures calling on various deities to obtain their blessings. As the centuries past and their knowledge of magic grew they past down their knowledge to either their own children or apprentices who showed an ability and interest. These continued the studies and added to the store of knowledge handed down to the next generation.
By the time that Moses led his people out of Egypt magic was a part of life of nearly every civilization. I recently read that when Moses turned his staff into a serpent the pharaoh was unimpressed as his magicians were doing the same thing to entertain his guests. Witchcraft and magic are indelibly linked in peoples minds even though they really have nothing to do with one another as the village witch was usually a magician of at least limited power. Actually until Christianity began to spread across Europe the village witch was usually the "priest" or "priestess" to the village. They communicated with the local deities and took care of all the spiritual needs.
Witchcraft in most of Europe did not fall out of favor until approximately the fourteenth century, during the start of the protestant reformation of the Christian church. That is when it was begun to be viewed as an instrument of evil. Many of the early Christian church leaders preyed upon the superstitions of the people and used things like a spreading illness or even a run of bad luck as signs that 'evil' was in their midst and that it's creator had to be the village witch. This effectively eliminated a threat to his authority and a threat to the supremacy of his deity. This mode of thinking has persisted for six centuries, the witch today is still looked upon with disfavor by much of modern society as a bringer of evil and often is seen as being in league with the "devil". Since no pagan witch believes in the Christian devil this would be a little difficult for them to accomplish. Most witches today still tend to use a fairly ceremonial form of magic and ritual although not as involved and complicated as the Wiccans use. Witches today still choose to work with the old Gods and Goddesses, many choose to work all the time with specific ones, many choose to work with a mixture of the Gods and Goddesses that they feel drawn to, calling on various ones for different needs. Many current witches feel that they have a connection with the planet that has been missing from modern society, they like working with the old Gods as they are directly approachable and they feel that there is a boon to be had by being able to be directly involved with the drawing of energy and the working of magic to take care of a problem and they like the fact that they are equals with their chosen deities in accomplishing their goals instead of being supplicants to an untouchable and unknowable "God".