On the Fiat Failure Fallacy
Fiat is authoritative and arbitrary.
My decisions as Dungeon Master are neither.
My goal in making a choice is to maintain the balance of enjoyment and challenge. To do that I must be impartial and confident. Part of being impartial is listening to what the players are saying and thinking about how the adventure is constructed.
That is neither authoritative, nor arbitrary.
Agency is not freedom. It is when the action taken matches the intent of that action.
Making a decision about putting a module in a sandbox, or deciding to run a certain game system, or outlawing certain classes do not affect agency. It just creates parameters.
What does this mean? It means that you can create a wandering monster table, declare that the duke goes to war, make these goblins automatically hostile, and you can even pick an encounter off your table to place in front of the players that you think will be interesting - all without violating agency or relying on DM Fiat.
It's not about decisions.
It's about control. It's about when you, as the Dungeon Master, think you know better to force something to happen. When you're going to fix it - keep anything bad from happening. Make it go the way you want and to hell with whatever anyone else things. No, you're track skill doesn't work. Anti-magic! Illusions! Palette switching!
Everyone always has a really good reason for this. "I wanted them to have a good time." "He brought the beer." "This encounter was too hard!" "This fight wasn't dramatic enough." etc. But, you know, the person robbing the bank had a really, really, good reason to do that. Doesn't make it right.
Some games pre-suppose narrative control for the players and aren't about character intent. Those games are cool and are not what is being discussed here. What is being discussed here are old school games, and there's an expectation of both freedom and fairness within them. That include the freedom to lose terribly. When not given that it turns into the kind of railroaded horror stories that drove people away from gaming in the 80's.
Running games are social activities. They are not neat, like math or chess. They are complicated, messy, draining, often stressful and forgetful situations. Dungeon Mastering is hard. Sometimes the line between what is and is not fair is truly blurry. Sometimes it's hard to even parse out if agency has been affected. If you're listening to your players and your priority is on maximizing the enjoyment of the activity, rather than on you (telling your adventure, having things go the way you want, maintaining verisimilitude or the literary integrity of your setting) then you have the correct stance.