Mesmer held that a subtle fluid pervades the universe and the body, that disease is an obstruction of its flow, and that a practitioner could restore the flow by passes of the hands and by magnetised objects. His Paris practice in the late 1770s and 1780s was a sensation: patients gathered around the baquet, a tub of magnetised water with iron rods, and underwent the convulsive "crisis" that was taken to signal the cure.
In 1784 Louis XVI appointed a royal commission, its members included Benjamin Franklin, the chemist Lavoisier, and the physician Guillotin, and what it did next matters far beyond Mesmer. Rather than debating the theory, they designed experiments to isolate it: subjects were told they were being magnetised when they were not, and were magnetised without being told. Blindfolded patients convulsed at trees they believed had been treated and were unaffected by trees that actually had been. The commission concluded that the effects were real and the fluid was not, and attributed the results to imagination.
This is one of the earliest blinded, controlled trials in the history of medicine, and it was conducted on an occult claim. Robert Darnton's study is the standard account of the episode and its political setting.
Mesmer's reputation collapsed and his practice did not. His follower the Marquis de Puysegur found that magnetising a patient could produce not convulsion but a lucid sleep in which the subject was responsive and afterwards remembered nothing, artificial somnambulism, which is hypnosis under an older name. Alan Gauld traces the line from there through Braid and Charcot to modern hypnotherapy, and separately into spiritualism, psychical research and the nineteenth-century occult revival, where the magnetic fluid reappears as Levi's Astral Light and, later, as any number of subtle energies.