When Can You Cheat?

Cheating is a rather contentious subject in any game and cheating can take many forms in a variety of games. As far as roleplaying games go there are two sides to this coin: GM cheating and player cheating.

How does a GM cheat?

1. Fudging die rolls. GMs can alter the game through misleading die rolls. Are the party members in a desperate losing battle? The monsters may miss a few more attacks than previously. Do the players need to remain unnoticed in a stealth situation? Perhaps the guards don't hear as well as they should. 
2. Applying templates or rules in ways that aren't allowed. A very memorable encounter I recently had was with a Dryad whose tree had died, but she was cursed to live on. I applied a few undead templates to her (Fey can't be undead). The encounter was memorable for both myself and my players.
3. Fudging die rolls (the other way). If the players are waltzing through every encounter with barely any effort, perhaps the monsters hit much more than they should. Perhaps the guards are rangers instead of fighters so they're better equipped to hear sneaky people. 
4. Change stats and gears on the fly. Maybe the monster needs a few dozen more hit points; maybe he has a few dozen less. Maybe the NPC has a few extra spells or a really fancy sword.
5. Lie to the players. Perhaps the NPCs have told the players some piece of information. Then over the course of a few sessions, you forget what you told them initially, so you tell them something different. The players will probably remember both and have an outcry. Instead of owning up and saying you forget, evolve the story in your head, shrug, and say "That's what he (the NPC) tells you."

 When should a GM cheat?

GMs should never cheat "just because"; you should only cheat when making the game fun demands it. Having the PCs die to a string of bad or good rolls, is hardly fun for anyone. Conversely, combat being ridiculously easy is hardly fun for anyone. GMs should only cheat when it enhances everyone's fun or it builds the drama and story. Of course increasing the drama means you have to cheat the other way if things get out of hand.

If you're cheating to teach your players a lesson or out of spite, don't do it. They'll pick up on it and become resentful and then it rapidly turns into no fun.

How do Players Cheat?

Players can cheat s much as GMs do. They can fudge die rolls and stats. They can lie about what they have or where they were.

When should Players Cheat?

Never. GMs should cheat to make sure everyone has the most fun possible. When players cheat, it's so they can have the most fun. Players caught cheating should be harshly beaten and viciously derided.

At the very least, they need a stern talking to and possible expulsion.