If we think about what happens in a typical sequence of play in a reasonably typical RPG, it looks roughly like this. First, in the fiction:
*One or more people are confronted with some sort of obstacle, challenge or similar opportunity for or instigation to action;
*The confronted person(s) takes(s) action to try and overcome or surmount the obstacle, take up the opportunity, etc
*Something happens as a result of what is done
Then we can talk about how this happens at the table.
*Someone authors the person(s) who will be confronted - including, in particular, giving them motivations/goals such that certain events or states of affairs count as obstacles or opportunities, etc, for them;
*Someone authors the particular obstacle, challenge, opportunity etc that confronts them;
*Someone authors the actions taken by the person(s) confronted;
*Someone authors the resulting events/consequences.
It's generally taken for granted that the authorship of those to be confronted is done under constraints - we call these the game's PC build rules.
The authorship of the motivations/goals for those persons is a contentious matter among RPGers, in part because it's often something that the rules are rather silent on and so it is left as an exercise for the participants. There are a couple of currently active threads - one about using published adventures, another about GMing mysteries - which to me seem to indicate that it is at least quite common for these motivations/goals to be "pre-packaged" in the sense that they are negotiated among the participants as a precursor to play ("We're going to play
this sort of game") rather than being worked out as part of play.
Where we get into GM fiat terrain is in the ensuing steps.
It's common for the GM to be the one who authors the obstacle/challenge/opportunity. What constraints govern this can depend on game rules - eg classic D&D has rules for building a starting dungeon of an appropriate level; Burning Wheel requires that the obstacle/challenge "speak", in some fashion, to a player-authored priority/motivation/goal for the character who is to be confronted by the obstacle/challenge; 4e D&D has expectations for assigning difficulties to obstacles; etc. There may also be non-rules-generated constraints, from X-card-y stuff ("No giant spiders, please") to shared expectations around what is fun, what makes sense in genre, etc. (Eg in my GMing of FRPGs I don't use sci-fi elements as components of the obstacles that I present .) Obviously there is a lot of scope for GM fiat here, but it varies across RPGs.
It's probably the norm for the players to author the actions taken by those who are confronted by the challenges/obstacles/opportunities. But there is plenty of evidence that GMs play a role in this too - eg by reminding players of their character's alignments, by asking "Are you sure?", by using explicit or implicit cues to signal what actions
must be declared if the adventure is to progress (eg no killing the "quest-giver"), etc. But mostly this stuff probably doesn't count as GM
fiat - it's more like GM commentary/advice/suggestions/directions.
The step of authoring
what follows from what the confronted person(s) do(es) is probably the most contentious in RPGing, and is probably where the greatest variation in approaches to GM fiat is found. Constraints that operate here can include those that consist in or follow from mechanical processes (D&D combat is a well-known example), or those that follow from non-mechanical principles (eg the Apocalypse World rules about when the GM may make a move as hard and direct as they like, and when they are more constrained), or those that combine both mechanics and non-mechanical principles (eg the rule in BW that if a player succeeds on their roll, then not only does that player's character succeed at their task, but they also attain their intent).
The example of the assassin who circumvents the Alarm spell lives in this space. The situation is one of the player's character camping. This provides an opportunity (eg to rest and recuperate) but also a threat (of being ambushed etc). The Alarm spell is cast in response, with the intention of reducing that threat. (By stipulating that intention I set to one side, here, the possibility suggested by
@Pedantic and
@Joanna Geist that the player's use of the spell is an invitation for an ambush.) What happens? In the assassin example, the GM uses their authority over vast elements of unrevealed backstory and setting stuff to establish and (ultimately) reveal a fiction in which the Alarm spell, although well-cast, does not actually protect the character who cast it.
Aetherial Premonitions, on the other hand, feeds into a mechanical process for determining whether camping leads to an ambush or some similar consequence, and so it is only
after the mechanical process is resolved that the GM might then be entitled, by the rules, to author some explanation about super-capable assassins or whatever. This is structurally similar to D&D combat, where the GM can't author that an opponent dodges deftly until
after the dice are rolled and reveal a miss by the attacking character.
If that last sentence is true, then the first sentence is not true. If the GM has the power to declare that any event they like is occurring, then (as a special case of that) they have the power to declare that some event occurs which interrupts the casting of the spell.
It's not true in all RPGs that the GM can (eg) declare that a mountain falls. That depends on the rules for framing obstacles and for narrating outcomes/results/consequences, as per what I've written just above in this post.
And I don't think it's very useful to say "it doesn't actually matter what the books says". Here's an illustration to show why:
Suppose that I'm discussing chess with someone. We're discussing the utility of rooks vs bishops, and one of us makes the point that bishops are confined to operating on, and threatening, squares of just one colour. It would be silly to respond, "But that doesn't matter because you can always cheat and move your bishop onto an adjacent square of a different colour". I mean, yes I'm sure that's a thing that someone playing chess once did; but the possibility of flagrant cheating isn't something to be factored into a discussion of how the game plays. (Unless there is a "meta" for the game in which cheating is so rife that it has to be factored in to anyone's approach to play.)
RPGing is the same. People can cheat on dice rolls; that doesn't mean that we don't talk about play assuming proper and honest use of the dice. Participants - players and GMs - can ignore the rules. That doesn't mean that, in discussing play, we assume that they will do so.
