A DM always participates in the game, the question to ask is if his/her participation is more in preparation for the session or is his/her participation more at the table itself. The DM as a more reactionary referee managing preplanned events at the table can be an comfortable trap to fall into thus becoming a more passive participant at the table. But the real fun and participation begins when the DM has no idea (just like the players) what may happen next.
It's a challenge for a DM, especially beginners, to not have a tight guide or plan for the session not that there's anything wrong with that either. One doesn't want to give their players a dull game or be looking up rules or descriptions so there is, indeed, some preparation required. And it is a bit of a safety net to have a more controlled environment with which to manipulate the players and session. And that's enough of a challenge for any DM's especially beginning DM's to run with.
But there comes a time when the training wheels come off and, as a DM, you jump into the deep-end, sometimes willingly and sometimes unwillingly with plenty of apprehension and fear. It is inevitable that your players will turn down that passage they were not meant to turn down, decide to explore that guild-house instead of the dungeon that you slaved over during the past week, or just trek off into the wilderness.
Instead of saying 'um, you can't go there', I suggest that you just let them go there. Take that plunge into the Deep End!
Those are the times when your players take you as DM into unexpected territory, unplanned events, unmapped locations. As stressful, scary and uncontrolled as that may sound, that is when the DM becomes full participant in the game. Acting and reacting with the players at the table who are also on their toes acting and reacting to the situations you throw at them. You are actively in the moment coming up with the maps, encounters, and events and treasures to toss at your players. You, as DM, become just as surprised at what might happen next as do the players. You become a full participant in the game. And that is what the game (at least classic, rules-lite versions of the game) was designed for.
Some of our best and most memorable sessions for many of the players and for me as DM were the ones where they took me in an unexpected direction. In a sandbox style campaign I do have to have some things prepared, but things are more prepared as potentialities then solid concrete events. These potentialities need to be flexible enough to change on a dime if they are even used at all. And believe me, if you open up the game to your players, they will bust that thing wide open. My players have opened up so many plot-points that the running joke is that their party seems to have ADD as they can never seem to finish something they started. It's not their fault as players or mine as DM. It's just the way the game rolled. Just the way the dice rolled. Just the way fate rolled. And in a sense, it's more true to the chaos of life and herein lies the beauty; The Chaos of the Game.
My game prep has become less and less as the sessions have become more and more fun. It helps to have great players, which I'm so lucky to have and a good collection of resources to fall back on.
So for you DMs out there apprehensive at taking that step off into the deep end. Close your eyes and take that plunge. The worst that can happen is that you get a little water up your nose. The best? One hell of a good time!
Some hints and suggestions when the unexpected happens:
1. Listen to your players. Often times they will mention their expectations of what might be beyond that next door or around that next corner or what they might want to accomplish. Why disappoint them? Let your players do the work for you.
2. Random charts. A must have. Make them yourself or better yet download some from the interwebs or copy some from magazines such as Fight On! or Knockspell. Many of the D&D blogs have posted custom charts for everything from general encounters to what might happened if your PCs carouse too much after an adventure. Many of these random results create events that almost write themselves and can lead to situations that can end up lasting sessions or be picked up on at a later date! Pick and choose the ones that you think may be useful to you. Sometimes the weirder the better. Remember that every action by the players should have a reaction in the game world. Collect these charts and tables into a binder for quick reference at the table.
Check out these links for some great charts:3. Get comfortable with winging things if you have to. Your players have no idea what you have prepared and what you make up on the spot. It will all appear seamless to them. Trust in that. Use table talk to your advantage and use that time to write some notes, draw some quick maps or create an encounter.
Age Of Fable
Old School Encounter Reference
Random Chart Madness with Jeff Rients
4. If you screw up a rule or don't have the stats in front of you, just use your best judgment and make it up. Sometimes a mistake behind the screen can leave the players with a mystery that may keep them wondering and guessing. Remember, listen to what they are saying it could spark a new idea for you.
5. Names! Coming up with NPC names on the fly can be a challenge for some DMs. It's one of my huge weaknesses, in fact it's become a joke at the table. Create a list yourself when you have the time and have a few names ready to go and attached to your screen (if you use one). There's a great fantasy name generator app if you have an iPod. I prefer not to use electronics at the table but any tool that helps you with this process is an asset.
If any other readers have suggestions, methods, ideas please feel free to post them here.