This has been a question that has come up in my games multiple times- In my research I found this,

"Xanathar’s Guide to Everything introduced the following new guidance on page 85 to describe why a character may not know what spell a spellcaster is casting. It’s important to remember this aspect of the game when using Counterspell, because you might not know what spell is being cast, and you may not even notice that a spell is being cast:

“If the character perceived the casting, the spell’s effect, or both, the character can make an Intelligence (Arcana) check with the reaction or action. The DC equals 15+ the spell’s level. If the spell is cast as a class spell and the character is a member of that class, the check is made with advantage. For example, if the spellcaster casts a spell as a cleric, another cleric has advantage on the check to identify the spell. Some spells aren’t associated with any class when they’re cast, such as when a monster uses its Innate Spellcasting trait.

This Intelligence (Arcana) check represents the fact that identifying a spell requires a quick mind and familiarity with the theory and practice of casting. This is true even for a character whose spellcasting ability is Wisdom or Charisma. Being able to cast spells doesn’t by itself make you adept at deducing exactly what others are doing when they cast their spell.”

I get that if you can not perceive a spell being cast you can not counterspell it, but do you also have to know what spell is being cast in order to counterspell it? Is there any official (Jeremy Crawford) ruling on this? (I can already hear my wizard complaining about having to waste a reaction in order to counterspell).

Well, counterspell itself is a reaction. I'm of the mindset that Counterspell is intended to be a bit of a gamble. In ideal conditions you would say to your players, "You see the wizard start to cast a spell", then pause for a moment to see if they want to counterspell, then describe the spell being cast. That said... I totally understand why it's usually done differently. Either way, nothing about counterspell requires the player to identify the spell first, or even after... when a spell is counterspelled the player might not ever learn what spell was about to be cast.

You don't need to know what spell is being cast to counterspell it, it's just that if you don't identify it you might wind up counterspelling a cantrip or something.

To presume Counterspell requires the Counterspell caster to _know_ the targeted caster's v/s/m usage is going to result in a specific spell would seriously hinder its use.  It can be used be tried against spells of higher level that the caster has access to, should it only be against spells the caster has observed or otherwise an Arcana check as prereq to it?  What about magic that's not accessible to the caster, how do they "know" it's coming?  

Game narratively I see Counterspell functioning more like Shield, basically a flinch response because the Counterspell caster knows Spellcasting when they see it or hear it.  I like DDS's take that in a certain ideal sense it should be a sort of "gamble" (which would lead to interesting "spell feint" strategies, where dueling magicians counterspell all their low caliber spells, then the big guns come out).  That said, I could also see groups who want to protect their spell slot resources have a sense of what they're counter spelling before they invest or burn the slot.  Realistic?  Arguably no, but it's one of those departures I could see some arguing makes for good gaming.

To the OP: As mentioned, counterspell does not require you to know what spell is being cast. All you need to know is that there is a spell being cast and then you need to decide which spell slot to use to cast counterspell. Since counterspell uses your reaction, you can't use the rules in Xanathar's to identify the spell before casting counterspell since both require the use of the character's reaction.

When I am running a game, I will announce to the players that a creature is casting a spell and it will be up to the player to decide if they want to counterspell and what level spell slot they want to use for it without yet knowing what spell is being cast. This does mean that they could counterspell a cantrip. However, NPCs usually have more spell slots to use on an encounter than PCs and will usually try to cast their spells rather than a cantrip unless they have a good reason for casting a cantrip at that point of the combat.

The Xanathar's advice would also slow the game down if it was required before every counterspell, since the players would have to stop and look up to see if the spell being cast was on the observer's spell list. For some spells it is obvious, but for many it would require a few seconds to look it up.

So I've been looking at the rules for magic items with casting and counter rules. Since you don't need to know the spell cast. If you identify a magic item or suspect that an item has the ability to cast a spell could you proactively counter based on someone say pointing a staff in the direction of someone? I know most if not all magic items remove the components need so things like a staff of the Magi negate the 25gp cost of arcane lock. But that also means no verbal or somatic components so no real indication of casting. But if you see someone say raising a ringed hand why couldn't I assume the ring has a spell to cast and counter it? Or counter someone with any staff that looks magical? Maybe I counter a quarterstaff swing maybe I counter a spell. Maybe the counter fails and the spell goes through because I countered at lvl3 a disintegrate and the roll just didn't cut it. It sounds like you can counter magic items but there is a greater chance that you counter a nonmagical hand or staff gesture. Thoughts, opinions, suggestions?

you cant determine the spell being countered as its a reaction to id it, you only get 1 reaction so counter or dont.

Quote from Cage2099 >>

This has been a question that has come up in my games multiple times- In my research I found this,

"Xanathar’s Guide to Everything introduced the following new guidance on page 85 to describe why a character may not know what spell a spellcaster is casting. It’s important to remember this aspect of the game when using Counterspell, because you might not know what spell is being cast, and you may not even notice that a spell is being cast:

“If the character perceived the casting, the spell’s effect, or both, the character can make an Intelligence (Arcana) check with the reaction or action. The DC equals 15+ the spell’s level. If the spell is cast as a class spell and the character is a member of that class, the check is made with advantage. For example, if the spellcaster casts a spell as a cleric, another cleric has advantage on the check to identify the spell. Some spells aren’t associated with any class when they’re cast, such as when a monster uses its Innate Spellcasting trait.

This Intelligence (Arcana) check represents the fact that identifying a spell requires a quick mind and familiarity with the theory and practice of casting. This is true even for a character whose spellcasting ability is Wisdom or Charisma. Being able to cast spells doesn’t by itself make you adept at deducing exactly what others are doing when they cast their spell.”

I get that if you can not perceive a spell being cast you can not counterspell it, but do you also have to know what spell is being cast in order to counterspell it? Is there any official (Jeremy Crawford) ruling on this? (I can already hear my wizard complaining about having to waste a reaction in order to counterspell).

 

 
So let's take a real world example. My party are up against Mind flayers. The Mind Flayers cast their magics through Psionics. That means no Verbal, Somatic, or Material components. As such there is not obvious way of knowing that a spell is being cast, or even what spell it could possibly be and thus counterspell as written cannot be used. 

By contrast, my party are up against a Dwarven Cleric. They can see the cleric move their hands in a way that makes it clear they're about to cast a spell. I do not tell the players what spell the Dwarf is trying to cast. They simply know a spell is being cast. As long as the player in question has a reaction and can see the cleric they can Counterspell the Dwarf's spell irrespective of what the spell in question actually is. This is the entire point of the Sorcerer's meta magics. Subtle Spell for example is a great way for a player character to avoid their spells being counterspelled. As standard no-one can cast a spell quietly and without notice if it has a Verbal component. 

I have in the past told a specific player that they recognise the somatic components of the Fireball spell as the caster is casting it - also giving them a chance at counterspell. I find that it's more fun that way. Again though it's a GM's decision how technical they want to get with the rules.

The important thing here though is in GM adjudication. I know some GMs who simply ignore spell components. I've played in one game where the DM allowed players to make a stealth check to see if they could cast a spell quietly and without notice - the DC being determined by the spell level. I love this idea, but it does somewhat negate the Subtle Spell feature. Likewise, I know some GMs who allow counterspell against any spell being cast irrespective of if a player character can see/hear it being cast. Similarly they allowed a Mind Flayer's spells to be counterspelled. I've even seen some GMs allow an arcana check to see if the player characters can determine which spell the enemy is trying to cast. The good thing about TTRPGs is that you can make them truly your own and bend them to your will like that.

In short, it's your call what you feel is fair or not. How a rule or mechanic is interpreted is totally up to you.

Also, in addition - Jeremy Crawford's opinions outside of the published books are sort or irrelevant here. The books got published - from there the only authority that matters in deciding how something works is you as a DM. End of story. They had their chance to get across what they meant when writing the books. If they weren't capable of being clear in their intentions prior to publishing then that's too bad. Once a book/rule is out in the world the only authority is the GM at the table. They are the ones determining how something is interpreted.