Minecraft – Output power if X players in radius Y around the command block

You want to do this with scoreboards. My solution won't prevent getting diamond swords, but it will prevent crafting them and using them, i.e. a player can have a diamond sword in their inventory, as long as they never use it. How it gets there without crafting it, though, is pretty much impossible without cheats.

First, you need to set up 2 scoreboard objectives, one for crafting, and one for using:

/scoreboard objectives add craftedDiamondSword stat.craftItem.276
/scoreboard objectives add usedDiamondSword stat.useItem.276

Next, you need to set up two nearly identical chains of command blocks, one for each scoreboard objective. This will run on a clock like you already have. I'll only give the commands for using, so just replace that in the second chain with the crafting objective.

First, clear those players inventories:

clear @a[score_usedDiamondSword_min=1] 276

Next, tell the players that used a diamond sword to not use it, and reset their score:

tell @a[score_usedDiamondSword_min=1] Don't use diamond swords!
scoreboard players set @a[score_usedDiamondSword_min=1] usedDiamondSword 0

This last command block doesn't really need the [score_usedDiamondSword_min=1] but it's useful.

I got this to work in a single line of command blocks with redstone over top for the uses chain, but it wouldn't work for the crafting. The solution is to pipe the result from the clear command block into the tell and set scoreboard command blocks with comparators. Here's a pic of the two setups:

Use whatever clock you want.

Additionally, if you never, ever want players to have a diamond sword, even in their inventory, and even if they don't use it, you can still clear from @a, and then just say to not use diamond swords if one is found.

Update for added 1.8 functionality:

The 1.8 snapshots have added the option to match players against the Inventory NBT tag when setting or incrementing a scoreboard objective. This means we can set up a dummy scoreboard objective to track whenever someone has a Diamond Sword in their inventory, regardless if they've used it or crafted it. First, set up the scoreboard objective:

/scoreboard objectives add hasDiamondSword dummy

Next, we need to run two command blocks on the same clock; one to set players scores, and another to check those player's scores and clear the diamond swords:

scoreboard players add @a hasDiamondSword 1 {Inventory:[{id:"minecraft:diamond_sword"}]}
clear @a[score_hasDiamondSword_min=1] minecraft:diamond_sword

The second command is fairly similar to the old commands, except instead of using the old ID number, I'm using the name instead. The first is a bit more complicated, so let's walk through it. Basically it says add to all players on their hasDiamondSword objective the value 1 if that player has an inventory and that inventory contains a diamond sword. So, for anyone that has a diamond sword in their inventory, their hasDiamondSword objective will be incremented.

Finally, like in the old version, we need to tell the players to not use diamond swords, and to reset their hasDiamondSword objective:

tell @a[score_hasDiamondSword_min=1] Don't use diamond swords!
scoreboard players set @a[score_hasDiamondSword_min=1] hasDiamondSword 0

I stacked these two command blocks (with the tell on bottom) and fed them with a comparator from the clear command block. This is what it all looks like in the end:

• /execute @p[rm=6] ~ ~ ~ /say The command worked
• /execute @p[r=5] ~ ~ ~ /say The command did not work

(both after the /spreadplayers command). The only problem with that is that it will still act as if the command didn't work if a player gets positioned inside the 5 Blocks radius.

EDIT: It is now completely possible with the CommandStat Data Tag:

/blockdataCommand Block Coordinates{CommandStats:{SuccessCountName:"Fake Player Name / Entity / whatever you're gonna use",SuccessCountObjective:"Scoreboard Objective Name"}}

Basically, you can make the SuccessCount output to a scoreboard. See the video below for more info!

EDIT 2: Maybe I should mention that you can then do some sort of execute on the entity if it has a score of at least 1. Also, you should set the score back to 0 at the end of every tick (/cycle of the clock).