I feel like that term that nottakenaway used best describes my sims - severely man-handled.

When I feel like actively playing I am continuously directing them to go do this or that, trying to fill at least one aspiration per sims day and keep their bars in the green. When all that is done then I take a breath and let them do their own things. free will is always on, but I must approve of their actions. This is just in case they feel like doing something like going outside to water plants at night, or taking out the trash when they should be working on a skill, or when greek uni sims try to go visit campus when they more important stuff to do and they just bring home garbage.

Free will is almost always on. When they're at home or on a community lot I let them make their own decisions and decide what to do. I do keep tabs on my Sims though, so I don't leave free will on and then go catch the bus. When they're in a business that they own, I disable free will, however, because I can't afford allowing my Sims to play computer games or socialize instead of trying to sell stuff to customers! For the most part though, my Sims are very much free, but as the player and dictator I can always overrule their decisions for any reason. For example, my Sim might find smustle dancing to be a great way to spend an evening, but I may disagree and say that studying to get that one extra mechanical skill point for a promotion tomorrow is better. Or, as I'd like to say it to my Sims:

"You are free to make your own decisions, but as the player and master I will always have the authority to overrule or cancel your decisions at any time. Muhahahaha!"

I am one of those players who micromanaged her Sims actions - but I've learned that letting them make their own choices can be an stimulating surprise.
So.
Freewill is always on. (Never cared to turn it off. Ever.)

I make sure to take care of their needs, then of their wants until the get into the platinum zone, if they may do something to get a bit closer to achieve their LTW that's the point when they give it a try. And only after all that I leave them to wander xD
For that reason children tend to use their freewill much more than adults (which kinda makes sense to me, responsabilities are like that).

That's being very controlling, hehe.
But I must admit I'm not always able to control them that much - I don't pause the game unless I want to take a picture of some event, so in those households with many members I typically can't micromanage so much. I focus on one, then on another, then on another, but in the meantime they do as they please.

I have free will on, but if I only have one sim, they don't get to use that free will much because I'll otherwise get bored, but if I have lots of sims, I mostly let them do what they want, and just keep an eye on their motives and aspiration bar. They're pretty good at keeping their own motives up if they have decent furniture, but sometimes they neglect their aspirations, so if their aspiration in in or near the red, I take over and start forcing them to complete their wants.

When I started playing (not that long ago, mind you - I'm one of the Ultimate Collection freeloaders), I used to micro-manage my sims, while still keeping free-will on most of the time. Yay for the pause button.

Since then I've played an Asylum. Now? Well, they've proven they can survive most situations without my input. Free-will is definitely on except when I want them to pose for a picture or things like that. I'll also give them a shove if they do something for too long, like lounging and sighing for hours - yes Jenny Smith, I'm thinking of you!, or when they've invited people over and decide to, I don't know, mow the lawn instead of letting them in.

The one thing I do that's definitely not natural for them is tell sloppy sims to clean up their mess. 'Cause I love it when they give me the evil eye. :D

I leave Free Will on if I've got a lot of items to keep them busy, and turn it off if the household has babies and toddlers (stop. playing. with. them THEIR ENERGY IS IN THE RED.) and I micromanage a lot, but I have a lot of mods to help sims take care of themselves better.

Some days I pick a household and watch them be miserable, even die. Others (especially with my sweet toddlers and huge households) even though I always have free will on, I micromanage everyone, even the pets!

Interesting how people play differently. Pets I don't touch at all ever. I don't do anything with toddlers and not much with children either - sometimes get the kids to do their homework (depends on what they're like). They're mostly freestyle in Little Carping.

Free will is a "must" in my Sims game, other wise without "freedom" for your Sims you really miss out on what they are capable of doing on their very own.
The Sims can offer many surprises if they are allow freedom, I do tend to have more control over who I want them to be with as a couple.
So even if my Sims have their freedom I still watch over them like a fairy-god- mother, because they do tend to do dumb things like standing in the mid of a fire or sometime running straight into a fire.
That why I am their fairy- god- mother so I can put a stop to their nonsense.