Hiya!
Yes. We do that. Have done it for decades.
Reason: It allows me, the DM, the opportunity to successfully RP NPC's/Monster's that have significant Intelligence, Cunning and/or Combat Experience in a MUCH more believable manner.
The Players each state their PC's intention. It's usually enough to be 'vague'; e.g., "I'm going to attack one of the ogres", "I'm going to cast Magic Missile at the leader", "I'll shoot my bow at someone". It doesn't have to be uber-specific, unless it's a spell. I need more info for those.
Then I can solidify what the bad guys are doing based on their capabilities (mental/combat experience/attitude). It allows me to 'dumb down' the bad guys tactics...use 'average' tactics...or 'on-up' their tactics. For example, goblins might just swarm towards the closest foe...the tanked up fighter or raging barbarian who steps way out in front...because goblins aren't exactly smart or known for their tactics. Likewise, a group of orcs might divvy up their attacks and might even have one or two hang back and use missile weapons against a caster. Finally, some super-genius monster or one that is very combat savvy (say, Mind Flayer, or maybe a Type V demon [Marilith]) I could "counteract" something the PC or PC's are planning simply because it's so damn smart and/or experienced. So if a Player declares "I'm casting Lightning bolt at the Marilith", it allows me to maneuver the Marilith in such a way that the Wizard's lightning bolt would have to go through a fellow party member, or might have to contend with partial cover or something. Now *I* as a human DM wouldn't be able to deduce that the Wizard, at that particular time, in that particular location would cast that particular spell...but I'm not an immortal demon constantly tested in battle, nor do I have an IQ of at least 180. So, by making Players Declare an action, it give me and my feeble human IQ a chance at RP'ing these creatures in at least a semi-believable manner.
^_^
Paul L. Ming