Hi, Mallus. I'll try to address all your excellent questions:
First, the example. In Burning Wheel, there is a very specific rule called "Let It Ride." Basically, the rule demands that after players have rolled the dice to decide some outcome, that outcome cannot be constantly "re-rolled." It must be maintained without further rolls for a reasonable time. Basically, this is a rule that gets all players (including GM) to agree that once they roll for something, they accept the outcome. This is opposed to rolling, not accepting the outcome, moving the goal posts a bit, rolling agin, not accepting THAT outcome, re-rolling ... etc.
Second, about the character actions helping the GM decide things. totally cool that this is your preference! Not much I have to say about that. It works for you and your GM, and that's what matters. The only thing I'd add to this is the observation that THAT THING you describe ("freeforming" and "just letting the GM decide" is, itself, a kind of system. It's an informal, unspoken, unwritten one, sure. But, it's a system. That it's functional is the secret to success. Seems yours works for you. Good.
Now on to our slightly different takes on GM Fiat. This gets pretty interesting, in my view, and the conversation so far is pretty cool. Hopefully you and others are finding some use out of it. Anyway ...
First off, I think I understand how you're using the term. I have much less problem with, say, the GM making up some non-standard NPC stat blocks than I do with, say, the GM just saying "the villain just gets away." With the stat blocks, I as a player still have means to intereact with, perhaps defeat if necessary, that NPC. I still make valuable choices about the game (attack this NPC, intimidate that one, etc.). That's cool. But, when the GM says "he just gets away" that drives me crazy. My preference is strongly against that kind of fiat. When the GM does that, he eliminates huge significant choices I might be able to make on the story (e.g. defeat the NPC, convince the NPC to join our cause instead, cast helpful spells on him, etc.)
Second, some examination of the chest examples. You said:
I don't really understand why its important how or when the DM decided the gem was or wasn't there. Or if they consciously decided it at all. Just tell me what I find it at we'll take things from there.
You can see in your language where you've ONLY talked about whether the GM decides at all, yes? That is, you have not talked at all about whether someone ELSE (other than the GM ALONE) works out the means by which the bauble is in the chest (for example, the player and the GM collaborate on deciding, and use the dice to determine the outcome). That's the entire point of those examples. You seem to be not interested in such possiblities in the interest of your preferences (i.e. "Decide already, GM, so we can play, because I'm cool with YOU deciding! Who cares how or why you do it! You do it, and the game goes on.") And, that's fine.
But, my point has been entirely that your supposition is not the ONLY possibility, even in D&D play. Since we're talking about deciding things that are "outside" the written rules of play, I see no reason we can't come up with OTHER means to decide such things that are often a "given" as the sole property of the GM. I view this as a false assumption about role-playing in general. It is mistaking a tradition or a personal preference for the whole range of acceptable options. In fact, there are many acceptable options that still remain "role-playing."
Third, you talked about having trouble envisioning play play where the GM completely disregards player input. In fact, I argue that this happens all the time. It's almost never as absurd and contradictory as the north / south discussion. But, it does happen.
For example, suppose you are the GM, and you've prepared a scenario for the start of a session -- a quick fight to get things moving and get players interested right away. You set it in the dark alleys of the Big City, and their old enemy (the one that "just got away" last time!) is going to attack them along with, oh, some were rats. You stat up the enemies, and are set to go because you just KNOW those crazy players will be wandering the Big City to buy and sell some new stuff. You even make a map of the store, and the back room where the ambush will occur.
Except they throw you a curve ball and tell you that they're all leaving the city first thing. Uh oh! Good-bye ambush. Except ... no. Now it's easy. Let's just have the ambush happen on the road in the dark woods. Neat.
So, here's a quicker version of what happens.
GM: "So you're in the city, when suddenly ... "
Players: "Nope, we're on the road.
GM: "Oh, I see. Ok, you're on the road when suddenly ... "
See? The players made a choice ... that had literally NO consequences on what the GM had already decided to put into play. It didn't matter whether they said they were on the road, in the city, or on a boat or whatever. Nothing they do will change your GM-mind that, by golly, they're going to get ambushed by this old enemy.
Now, this could have gone differently, sure. Once they left the city, the GM could ignore the ambush. Or save it for later. Or, throw something else at them. Or not. Most anything we could imagine could happen. But, in this example, what DID happen is that the GM decided something, and no matter what the players decided that might contradict it, the GM just moved the goal posts. In other words, the players had no real choice at all.
They might as well have said "We go north." And, in his mind, the GM thinks "Well, they go north, sure, but I'm going to throw the South thing at them anyway. They'll never know the difference." and he says "Ok, in fact you go north (scribble scribble)." Roll!
I find this play utterly distasteful and unfun. Many, many other role-players do not. More power to 'em, I guess. It's just not my thing. It's not objectively WRONG. It's just not what I prefer.
Now, you also asked, how in the heck would we KNOW this happened? Usually, we wouldn't. Pages and pages of "GM advice" cherish exactly this kind of sleight of hand. It's held up frequently as "Good GMing." Indeed, one of the secrets to its success is that the player NEVER find out the GM is fudging and moving the scenery behind the curtain and all that.
Why? Becauses if the players find out that the GMs is really his parents dressed up as Santa Claus, they'll begin to mistrust what he says about their input in the game. I have participated in such games. It is the reason I find the play style distasteful!
Fourth...
If you reply by saying "Well, the GM should take my character's actions into account." Ok, fine. That's cool. But, then it's not GM Fiat anymore, is it?
Yeah, I'd say it is. But I've already admitted my working definiton of fiat is broad enough to be... err... junk. Perhaps we need something better.
You're right! That was an awful example from me. It IS GM fiat as I read it again, even as I have been using it. Yes, GM fiat can indeed involve input from the player, maybe from the player's character sheet. (For example, "Hmm, his best skill rank is Hide ... ok, how about this happens ...")
I think my point there is this: Even if you make some input via your character's action -- particuarly even if you make a die roll ... none of that especially matters. Sure, the GM can take those things into account, but the decision is ultimately his, without much recourse. You can't say "Hey, no way! I rolled an 18! No way that happens!" You MIGHT be able to say "C'mon, man, no way. My guy's Hide skill rocks! How come THAT happens? No way." The GM can change his mind, but nothing's forcing him too (nothing except you getting up from the table and ceasing to play). He chooses what he chooses, for the reasons he chooses them. And, frankly, that's his prerogative in the game for most groups.
But, me? No thanks. Again, this is a matter of preference. Given the choice between this GM fiat here, even with my "input" and some other means, I'll choose the other means every time. Not all groups and GMs offer that choice, and not all groups WANT to. More power to 'em, too!
The real difference is one of SYSTEM -- where system INCLUDES the "unwritten" stuff that your group uses to decide how things happen in the game. GM Fiat is one kind of system. It's the system your group uses to decides stuff when it's outside of combat, for example. But, there are OTHER kinds of system (unwritten ones, usually) that can work, too. I'm advocating my personal preference for such systems, and trying to demonstrate they are feasible. But, I'm not trying to convince you or others one way or the other that GM Fiat is awful, terrible stuff and you should do something like me.
Wow, that was MUCH longer than I intended. Oh well, hope you and others find something interesting in there. Food for thought, let's say. This is a good thread; thanks for talking about this stuff!