Yes, magnesium reacts with iron chloride. The reaction between magnesium and iron chloride is a single-replacement reaction, where magnesium replaces iron in iron chloride. The products of the reaction are magnesium chloride and iron. The reaction can be represented by the following equation:

$$Mg_{(s)}+FeCl_{2(aq)}\rightarrow MgCl_{2(aq)}+Fe_{(s)}$$

In this reaction, magnesium is oxidized from a neutral state to a +2 oxidation state, while iron is reduced from a +2 oxidation state to a neutral state. The reaction is also exothermic, meaning that it releases heat.