Fate holding a key-like staff and making it appear all arround the place made me realize that he's the lost son of Sora (from Kingdom Hearts) and Sakuya Izayoi (from Touhou) ...
Anyway, seems like Fate borrowed his master's power for this battle. Whatever it really destroys and creates words or not, it bothers me more what did Fate mean when calling Rakan a puppet, as well as which is his real mission.