Nels Anderson @ Gamasutra: "To many, the appeal of games is being able to meaningfully interact with a world, making decisions with lasting consequences. Unfortunately, providing this is a very difficult challenge for developers. The combinatorial explosion that even a small number of decisions creates requires providing outcomes for all possible combinations of decisions. Just creating that content is a tremendous amount of work; creating it in such a way that all outcomes connect harmoniously and do not feel unnatural is realistically impossible.
Commonly, developers address this issue either by providing small, isolated pockets of agency that do not interact or by providing choices that are largely illusory, with the core story hitting on the same beats regardless of the player's specific decisions.
Interestingly, Fallout 1 & 2 addressed this issue cleverly, but Fallout 3 abandoned that device for a weaker solution. If Fallout 3 had augmented this instead of abandoning it, I think it could have represented a more significant step toward minimizing the complications of these issues."