Use the Artistic Filter -> Paint daubs to create the painting look on the source

Extract the dog from the external source and place on the the background

Because this source has low quality and the appearance of the dog is not desired to me, I make the fur on the dog by brush tool. I used tablet, with high opacity, flow with opacity and flow jitter

Use the brush the draw the facial structure of the dog

Sketch the girl by brush

Draw her face by low opacity, flow brush (but high opacity and flow with the detail)

Apply the shadow and the highlight on the face

Draw the hair on the new layer

Draw the armor and the cloak

Apply the shadow and highlight

Make the air craft: extract a part of the source

Assembly with the small part from the left side of the source

Assembly with the glass window in the center of the source

Use the part of the building below the region I selected in the previous step, distort a bit than assemble with the others to finish making the air craft

Make several smaller air craft by resizing and distorting

Draw the explosion on the top of the building. To make the smoke: create a different cloud layer (black and white), then make the transparent gradient around, define it as the brush, then use this brush with scattering and flipping option. For the explosion: use the low opacity brush to draw the red outline, then the yellow region inside (hotter region), then the white area in the center (heat center). Behind the fire and the smoke, make a layer, draw with these color (red outside, then yellow, then white), use the smudge (strength around 70-80%) to make it look like the explosion (draw out from the center of the explosion the radial direction)

Invert the color of the background. Now I draw the icebergs just by eraser (the white part is the original background I place beyond the inverted one)

UPDATED: the creation of the magic wand
First, make a globe by pen tool, change the blending option with inner glowing, inner shadow, emboss and bevel.
Then extract a part of the building in the source (you can easily see which part I used) to make the "leaf" behind the globe

Duplicate the "leaf" layer several time and arrange them like in the figure

Rasterize all the layer, use burn tool to make the shadow

Extract the bottom of the building to make the stick

Duplicate the globe layer, one layer is placed in the bottom, one on top of these layers. Cut out the "junction" between the globe and the "horns"

Draw the top of the globe by pen tool