These are good skills, to start with:
The Three Top Skills a DM needs:
1) The Ability to Adapt
2) The Ability to Improv
3) The Ability to BullshitMaster these!
— Terminally Nerdy (@terminallynerdy) April 11, 2017
…but there’s also a fourth: The Ability To Trust. Specifically, the ability to trust your players. I run some highly freeform games, and my players know full well that I GM by the seat of my pants. But there are advantages to that, for PCs: for example, it allows them the opportunity to insert the stuff that they want for their characters into the campaign. Plus, when it’s all done right the campaign feels more, I dunno, organic, or something.
If there is a flaw in this system it’s that it makes the “Bow to my every whim, mortals!” style of GMing effectively impossible. But I’ve never personally been any good at that particular style, so that’s not really a flaw in my eyes. It may be, in yours. I’m not judging.
I had a very similar philosophy when I played. My players knew they could try just about anything. There would be consequences, of course (one unfortunate character tried to kill a fire elemental by urinating on it. That did not end well.) but they knew they could at least try.
I always thought the purpose of playing RPGs was to create stories together, and I figured, the more people telling the story, the richer and more interesting it would be.