ANYTHING NICE: Fall From Heaven 2 (Derek Paxton)
FFH2 is a full-conversion mod which turns Civ IV into dark fantasy complete with gods, apocalypses, magic and a giant helping of lore from the designer's long-running homebrew D&D campaign. But in a good way. (Paxton was subsequently hired by Stardock to work on fixing their flawed Elemental design, and did the excellent job you'd expect.)
Random events give story choices. At one point you're called on to judge the case of a citizen who wants to adopt a harpy fledgeling with an astonishing singing voice. Killing it gives you a popularity bump, saving it gives you a popularity hit and a Great Bard. What I like about this is that plugging the narrative outcome into the game system - the Great Bard - is seamless immediate shorthand to help frame the choice meaningfully.
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'Anything Nice' is is a series of very short posts highlighting things I liked about the treatment of narrative in other people's games. It's a deliberately magpie, grab-bag approach. Some of these games I adore, some I don't even like, but I learnt from all of them.