The card says "You may discard your whole hand (minimum 3 cards) to charm a single Monster instead of fighting it." Can I use this on another player to charm his monster? Or does it only apply to a monster I am fighting?
The charms only work for wizards in the combat. From the Munchin FAQ
Q. Can a Wizard use his charm ability if he's not involved in the combat?
A. No. The card says this is something he may do instead of fighting a monster. It's not for interfering with others' fights, so the Wizard in question must be the munchkin who opened the door or is helping.
Nice try but you can't charm an opponent's monster unless you are helping in combat. If you somehow manage to become part of combat, you can betray them by charming to prevent them from killing a monster and gaining a level.