The interactions between metal ions and proteins are ubiquitous in biology. The selective binding of metal ions has a variety of regulatory functions. Therefore, there is a need to understand the mechanism of protein-ion binding. The interactions involving metal ions are complicated in nature, where short-range charge-penetration, charge transfer, polarization, and many-body effects all contribute significantly, and a quantitative description of all these interactions is lacking. In addition, it is unclear how well current polarizable force fields can capture these energy terms and whether these polarization models are good enough to describe the many-body effects. In this work, two energy decomposition methods, absolutely localized molecular orbitals and symmetry-adapted perturbation theory, were utilized to study the interactions between Mg2+/Ca2+ and model compounds for amino acids. Comparison of individual interaction components revealed that while there are significant charge-penetration and charge-transfer effects in Ca complexes, these effects can be captured by the van der Waals (vdW) term in the AMOEBA force field. The electrostatic interaction in Mg complexes is well described by AMOEBA since the charge penetration is small, but the distance-dependent polarization energy is problematic. Many-body effects were shown to be important for protein-ion binding. In the absence of many-body effects, highly charged binding pockets will be over-stabilized, and the pockets will always favor Mg and thus lose selectivity. Therefore, many-body effects must be incorporated in the force field in order to predict the structure and energetics of metalloproteins. Also, the many-body effects of charge transfer in Ca complexes were found to be non-negligible. The absorption of charge-transfer energy into the additive vdW term was a main source of error for the AMOEBA many-body interaction energies.