Everyone tried at some point to warn Willow that she was dealing with something out of her control. Oz in Season 4, Fear Itself, talks about how he has concerns over Willow tapping into Dark Magic.
It wasn't about dark magic. Willow just wanted to move from one level (glamors, levitation and such) to the next (conjuring and transmutation). Willow described it as a little scary and close to the primal forces as she was talking to Buffy about her eagerness mixed with apprehension but it was never understood as dark magic.
It's a good thing that Willow overrode Oz's concern (that was mixed in with trust and asserting that he'll back Willow's play) to progress to conjuring. For the first event that required conjuring/moving beyond simple levitation and glamors, Buffy and Faith would be trapped in the others' body indefinitely if Willow didn't progress.
Again making this conversation about "Should Giles have stopped Willow from using magic?" misses the point. Giles *encouraged* Willow to do magic and progress more than any other character on the show, including Tara, Buffy or Amy. He first brought her into it by giving her the vampire disinvite curse in
Passion to do on her house/Buffy's house/Cordelia's car with no adult supervision. He asked suspiciously what she was doing in
Faith, Hope and Trick and then when she reported and asked about his feelings about it and he gave her an abrupt "It's fine". He loaned her books and sold her ingredients. He requested spells in
Living Conditions,
Primeval,
Something Blue,
Blood Ties and
The I in Team. Presumably, her level of power was one of the things that made him comfortable enough to leave in
Bargaining. She wanted to quit magic after S6 and he brought her to England to train her powers so she could be a powerful weapon for good and then sent her back to Sunnydale before she felt ready because they sensed an apocalypse on the horizon.
It's to the point that Giles wouldn't be Giles if he didn't take advantage of a clear resource in the fight by encouraging Willow and that I don't think that Willow would have gone as far as she did if she didn't have Giles's materials and tacit approval and first push in
Passion.