As a DM, I create an environment of a world with stories, plots and drama. The players interact with the world and shape the story, plot and drama. In the end, an adventure is formed.
Any DM who says he doesnt take part in the story is kidding himself else the players would show up at the game table and there'd be nothing to do. Quas, you've asked two different questions. That should answer the first.
The second question would be a definite no. My arching stories don't involve the pcs, so a pc death wouldn't screw up too much. I never go with the "destined hero" thing because its bait for railroading. The pcs could choose to investigate the disappearance of the emproer or go on some dungeon hunt while the army presses in.
Of course, there will be consequences either way.