čarobnica

1. sorceress; enchantress; witch
   U bajci dobra čarobnica pomaže princezi. — In the fairy tale, a good sorceress helps the princess.
   Ćerka se za maskenbal obukla kao čarobnica. — My daughter dressed up as a witch for the costume party.
2. (of a woman) miracle worker; enchantress
   Moja baka je prava čarobnica u kuhinji. — My grandma works real magic in the kitchen.

"Veštica" is usually negative, while "čarobnica" is mostly neutral or positive.