I do a mix. I set events in motion and the player's are always free to pursue or abandon whatever thread they want. On the other hand, I'll make it clear if they are biting off more than they can chew.
I also dangle plot hooks and events for them to choose from that are level appropriate. I don't have a problem if they need to do a valiant retreat now and then, but I also want them to get a sense of accomplishment.
Exactly this.
@Morrus I think you have badly misrepresented the way the "Party" method works. IMO, you have fallen into the trap of assuming a Skyrim-like "absolutely everything dynamically shifts to be perfectly within a +1/-1 level range of the party." You generally wouldn't (for example) have radically uneven difficulties over a handful of nearby hexes in a hexcrawl sandbox, by which I mean "level 1 and 2 adjacent to level 18 and 20 adjacent to level 3 and 4 adjacent to level 19" etc. in such WILDLY swinging values, even though you COULD do so, because doing that is emphatically NOT best practices for an enjoyable sandbox. Likewise, a world where everything is in perfect lockstep with the players by DM fiat is not best practices for an enjoyable "party" game as you call it.
Instead, as Oofta says, you plan some things out with an eye toward what makes sense, but that involves two opposing patterns: ecology, and behavior (both from and toward the PCs). Ecology says that situations
exist, independent of PC participation or observation. If I know an enemy faction is active in an area, and I know the party has been informed of this, I don't feel bad making things tougher if the party decides to focus their efforts elsewhere. I don't punish focusing on Big Serious Problems or the like, the PCs have a lot on their plates and can't solve every problem in a day. But serially ignoring an addressable threat means that threat can and should
advance, fester, intensify. For more passive things, problems may stay the same or get worse, depending on their nature: a rat infestation that's been around for a while likely won't suddenly get horrific, but if giant bees have been moving in from elsewhere, bee attacks will likely increase over time.
On the flipside, there's the behavior of people toward the party, and of the party toward the world. The party doesn't want to be always doing stuff beneath their skills, they want to make good money, fight problems that will make the most difference, and help allies as much as possible. It is in their interest to avoid wasting time on small fires when there are big ones to put out first. And both enemies and allies, potential or actual, will want to account for the party if it's reasonable to expect their involvement...and NOT account for them if it wouldn't be reasonable to. A crooked shopkeeper doesn't buy the absolute best locks money can buy; he buys locks that he feels confident no robber is likely to break, within his means. The PCs, even early on, are more skilled than random thieves, and thus a challenge meant by the shopkeeper to be beyond the reach of Jane Doe thief is likely NOT beyond the PCs' reach. And if they're being hired for jobs (which is quite common), the contractee is almost certain to be filtering out applicants who seem too weak to do the job, or those who seem overqualified and thus likely to demand higher payment for their skills.
So, on the one hand, some things in the world may fester or stay the same, whenever they aren't tackled by the party. On the other, the party AND agents in the world can both set rational principles for why a particular scenario or challenge is at, below, or above the party's skills. The interplay of these two forces is what makes a vibrant, enjoyable "party-style" game: the players have every reason to expect that a quick warehouse job will be easy (though extra wrinkles or perks* may come into play!), while also expecting that if they get a job it will reasonably fit their skills unless they've acted to prevent that, and knowing that if they ignore a threat it will often get worse.
*e.g. that warehouse job: for a lower-level party, simply getting in and getting out alive may be the challenge. For a high level party, they can instead shoot for a perfect ghost run: not just getting the goods/secrets, but doing so without anyone being the wiser? Absolutely a wrinkle, but one that befits the skills of a talented party and which can fully justify a higher-difficulty challenge in a "low-level" situation.