Huh. So this sounded interesting and I went searching around for it.
From your description, it seems like it's a movie called The Archer: Fugitive From The Empire (also known as The Archer and the Sorceress).
This clip (note: spoilers because it's part of the final battle) has the big bad with a magic axe (I've timestamped it because it's a relatively long), and it looks like the power comes from glowing stones they use, but I'm not certain.
Will have to see if I can find a good source online. Looks like it got a pretty limited release on VHS and DVD.
There was another option, but I ruled it out when I saw the stuff above. In case you're interested, the other one was called Conquest, which seems like a very bizarre movie featuring some odd BDSM themes and a magic bow that has sci-fi laser pistol pew pew sound effects for some reason.