Are we the masters of our own fates, or does a higher power control our paths? When we make choices, are they actually our own, or is everything predetermined? These are the kinds of brain-tangling questions The Golden Compass wants us to think about. Lyra is caught up in a contest between fate and free will. According to many characters, she's fated to play a key role in the future of mankind, but she has to do so as if she were making her own choices. Is your head hurting yet? Other characters, though (Lee Scoresby, we're looking at you), think that this is no fate; we create our futures based on the choices we make.
Serafina Pekkala is right that in the world of The Golden Compass, life is ruled by fate. We know this because despite the choices Lyra makes, she ends up fulfilling the prophecy that she would be a betrayer.
According to The Golden Compass, it is better to live in a world driven by free will than by fate. That is why all of the "good" characters support Lyra, whose destiny "is to bring about the end of destiny" (18.19).