I'm not quoting him as if he was writing scripture. I'm quoting the rules that he wrote. They define a game with a clear goal (collect gp to earn XP) and a clear structure of play.
Remove the goal, and how to players know what they are supposed to be doing, what counts as successful play? In non-classic D&D, which became predominant in the mid-80s and "official" with AD&D 2nd ed, only the GM can answer that question. The GM tells the players what they are expected to do, to play well.
It has much the same meaning, in the context of classic D&D play, as it does in relation to any other game - it means having the skill and experience to play the game well, that is, to succeed in play.
Gygax, in the passages from pp 107 and 109 of his PHB, tells us what some of the key skills are: knowing how to plan and prepare (including, especially, how to choose an effective spell load out); during play, being able to make judicious choices about how to navigate through the dungeon, respond to wandering monsters, and the like; after an expedition, ensuring that treasure (especially magical treasure) is sensibly distributed, arranging the raising of dead party members where possible, etc.
Someone may or may not care for this game and its concomitant skills, just the same as someone may or may not care for bridge or backgammon. But the game is a coherent and fairly straightforward one, and the skills are not all that opaque. Probably the hardest one, at least for me personally, is patience. For me, that undermines my planning and even moreseo my judicious choices. Hence why I'm not a particularly good dungeon-crawler, and don't particularly enjoy that sort of RPGing.
The % in lair is for wilderness encounters, as part of the hexcrawl procedure; it is the chance that a wilderness encounter with such a creature is an encounter with it in its lair (where its treasure will be, and where there are likely to be larger numbers). If you look at the DMG Appendix C dungeon encounter tables, you will see that the "number appearing" is different form the MM numbers. The Appendix C numbers are the ones for dungeons.
I've already posted a response to @mamba's similar point, not far upthread.
A dungeon is, at its core, a map and key. The players navigate the map by declaring actions for their PCs. They trigger encounters by opening doors, and by having wandering monster dice come up 6. The GM writes the map and key; but the GM does not control where the players go, nor how long they stay in the dungeon. Hence the GM does not control the triggering of encounters (= the framing of scenes).
The players don't have complete control either, but they are able to exercise a degree of control by skilled play, as per my posts upthread.
Once the GM decides what the goal of play is, and what scenes will be framed, and - often, given the very limited scope of AD&D's action resolution rule - the outcomes of declared actions, we are talking about a completely different game. It moves from a skill-play-oriented dungeon crawl, to a GM-driven, GM decides game.
Yes. This is well known, as per my reply to @mamba just upthread.
And as I have already posted, the more that the GM does this, the more the game becomes one of GM decides.
For clarity, classic D&D skilled-play dungeon-crawling and GM decides are not the only two possibilities in RPGing. They are not even the only two possibilities in D&D play (see eg this approach to 4e D&D, also discussed a bit in this thread). But they are the two best known in D&D play, at least as best I can tell; and GM decides seems to be the most mainstream approach.
