I saw a lot of talk in comments (and comments moved to chat) about the Taylor series. I also indicated an answer in my comments which avoids Taylor's series and instead proves derivative of $x^{n}$ using basic algebra.
From OP's post it is clear that an answer based on binomial theorem which holds for general real index is desired. View point of OP is correct, but requires some more effort to establish the general binomial theorem and my post below does exactly that.
In what follows we assume that $x > 0, n \in \mathbb{R}$. The questions asks us to prove $$\frac{d}{dx}x^{n} = nx^{n - 1}\tag{1}$$ Note that when $n$ is irrational the symbol $x^{n}$ can not be handled by algebra and hence it is useless to expect a proof which is based on algebra alone.
However when $n$ is rational then $x^{n}$ is an algebraic function and it makes sense to have an (almost) algebraic proof. So we first deal with the simpler case when $n$ is rational. One of the approaches is to use definition of derivative and focus on the ratio $$\frac{(x + h)^{n} - x^{n}}{h}$$ and here we can write $$(x + h)^{n} = x^{n}(1 + h/x)^{n}$$ and then apply general binomial theorem to expand $(1 + h/x)^{n}$ as an infinite series. There are two viewpoints regarding this approach:
- This approach appears circular because expansion of $(1 + h/x)^{n}$ when $n$ is not a positive integer essentially requires Taylor series and involves the derivative of $x^{n}$. This point of view is almost correct.
- It is possible to establish the general binomial expansion of $(1 + h/x)^{n}$ even when $n$ is not a positive integer without the use of derivatives. This is the point of view of this answer.
Let $n \in \mathbb{R}, |x| < 1$ so that the series $$f(x, n) = 1 + nx + \frac{n(n - 1)}{2!}x^{2} + \frac{n(n - 1)(n - 2)}{3!}x^{3} + \cdots\tag{2}$$ is absolutely convergent and $f(x, n)$ is well defined.
Let $p, q$ be positive integers then we know from the binomial theorem for positive integral index that $$f(x, p) = (1 + x)^{p}, f(x, q) = (1 + x)^{q}, f(x, p + q) = (1 + x)^{p + q}$$ and therefore $$f(x, p)f(x, q) = f(x, p + q)$$ and considering the coefficients of $x^{r}$ on both sides we see that $$\binom{p + q}{r} = \binom{p}{0}\binom{q}{r} + \cdots + \binom{p}{i}\binom{q}{r - i} + \cdots + \binom{p}{r}\binom{q}{0}\tag{3}$$ where we have by definition $$\binom{a}{0} = 1, \binom{a}{r} = \frac{a(a - 1)(a - 2)\cdots (a - r + 1)}{r!}\tag{4}$$ for all real $a$ and positive integer $r$ so that the general binomial coefficient is actually a polynomial in $a$.
We can now see that the identity $(3)$ is an identity which involves polynomials in two variables $p, q$ and it holds for any infinity of values of $p, q$ (it holds for all positive integers $p, q$) and hence it holds identically. Therefore the identity $(3)$ is true for all variables $p,q$. Now by multiplication of infinite series we see that the following identity holds for all real variables $p, q$ and $|x| < 1$: $$f(x, p)f(x, q) = f(x, p + q)\tag{5}$$ and thus $f(x, p)$ behaves like an exponential function as far as parameter $p$ is concerned. It follows by the use of the above functional equation that $$f(x, n) = \{f(x, 1)\}^{n}$$ if $n$ is rational. Hence we have $$(1 + x)^{n} = 1 + nx + \frac{n(n - 1)}{2!}x^{2} + \frac{n(n - 1)(n - 2)}{3!}x^{3} + \cdots\tag{6}$$ for all rational values of $n$. This means that the general binomial theorem for rational index can be proved without any use of derivatives and using this we can establish the derivative of $x^{n}$ for rational $n$.
What happens when $n$ is irrational? The first problem is to define $x^{n}$ for irrational $n$ and there are many approaches and the simplest one is define it as $x^{n} = \exp(n\log x)$. With this definition it is easy to prove derivative formula using derivatives of exponential and logarithmic functions.
Another approach is to define $x^{n}$ for irrational $n$ via continuity. Thus if $n_{k}$ is a sequence of rationals tending to irrational $n$ as $k \to \infty$ then we define $x^{n}$ to the limit of $x^{n_{k}}$ as $k \to \infty$. If we adopt this definition then we can prove with some effort that the function $f(x, n)$ is a continuous function of $n$ for all real $n$ and fixed $x$ with $|x| < 1$. And hence by continuity the general binomial theorem holds for all real index $n$ and our problem of calculating derivative of $x^{n}$ is handled in usual manner indicated above.