This is something I've been kicking around for a while now. I've referenced the idea in a few posts already, but I haven't really developed the idea anywhere yet. I started writing another post and realised that I needed to write this one first.
I realised the importance of how a ruleset positions itself relative to the fiction from playing D&D 4e. (Don't worry, this won't go into rant territory, especially since this subject is what made me realise that my not liking 4e is a matter of my own temperament rather than due to any faults in the game itself.) I didn't like what was happening in that campaign, and my understanding of how we were playing and of how the ruleset interacted with our preferred play styles has been slowly developing since.
4e's attitude to the fiction is that it's interchangeable. The fiction might not be interchangeable to the players, but the rules will smoothly function pretty much regardless of what fictional fluff you dress them up in.[1. This is an advantage of the system to some people. I'm not saying they're playing wrong, only that it's a disadvantage for how I want to play, as we'll see.] I know that many people object to the term "fluff", and I tend to agree with them, but in this case I think the term is accurate. 4e makes a hard distinction between crunch and fluff, and they only intermingle during the design process, whether that is the original design of the class Powers or the process of homebrewing new stuff.
For my own enjoyment I prefer a system that has a constant and fluid exchange between the fiction and the mechanics during play, with fiction getting the first shot at defining the game reality. In order to do that the system has to let me make choices based directly on the fiction rather than on the mechanics. The mechanics of such a system support and help adjudicate those fiction-based decisions. In short, I must be able to make reasonable decisions based on my character's understanding of the world they inhabit, and know that the mechanics will support my choice.
In contrast, there are systems that require rules handling before the player can decide on a course of action. 4e is the nearest example to hand. In combat, you can't say, "I close with the troll and hack off the arm holding its victim!" Actually, you can say that, but I doesn't mean anything yet. You still have mechanical decisions to make after such an announcement: whether that's a normal move, a shift, or a charge; which squares your character will pass through (possibly triggering traps or opportunity attacks); and which Power will be used for the attack. Similarly, drinking a healing potion isn't a decision that can be made absent of mechanical considerations in 4e: you have to have healing surges left for a healing potion to have any effect.
In such a system, there is no direct and unambiguous translation between a fictional declaration and the mechanical implementation of the action. The way the system works, my focus on making a statement of fiction does not move the game forward, but actually slows it down.
Sometimes the mechanics of such systems actually contradict the fiction, such as in the case of the healing potion. At those times my decision cannot be based on the fiction, as the healing surge mechanics have priority over the fictional "truth" that drinking this magic potion will heal wounds.[1. Some of you may have houseruled this already. That's great, but my point still stands: There are systems—4e is one of them—that put mechanics before fiction.] I have to reference the mechanics first in order to make a "good" choice about whether I should use the potion now or later. The fiction is secondary, and possibly irrelevant to making the choice.
Having written all that, I saved it and left it alone to simmer before I wrote the conclusion only to quite serendipitously discover a post of Joshua's from two months back on the very same subject. In RPG Rules and the Direction of Causality he describes how causality can flow either from the game world to the rules, or from the rules to the game world. It can never be both at the same time, although play styles may switch back and forth and a single system can contain both rules that respect the game world and rules that insist on superseding it.
As usual, Joshua cuts right to the heart of things while I beat around the bush, so go read his post. Essentially, I'm saying here that I prefer that causality flow from the fiction to the rules, and that I prefer systems that have a majority of rules that support that style of play.
There's no pithy term that I can extract from that article, unfortunately. Scott of A Butterfly Dreaming wrote a post entitled The Rules Gap in response to Joshua's post, in which he coined the terms "game fits the rules" and "rules fit the game" to describe the distinction. I find that ambiguous, and I think that ambiguity is why I disagree with where he goes from there. I suppose I'll stick with "fiction first", or just addressing causality explicitly.