The game master should know and understand the material in the general player's section, and in addition the material in the game master's section.
The game master is the referee and the "everyone else", the one who designs adventures and governs the pretend world play occurs in.
There are several components which should shape play. A proper mixture and balance of these different elements, like a balanced diet, provides the most enjoyable passage of time.
Role play, personal interaction, acting — this is (especially) when characters talk and do things in a way that shows their personality. This is perhaps the most central part of play; it is at least the one which this genre of game is named after. This lies more with the players than with the game master in that it is something the players do; the game master's role here is just to encourage and to provide opportunities conducive to good role play. (Ergo, a quest more robust than two riddles, a logic puzzle, three locked doors, and a maze leading to a chest of gold.)
Challenge, problem solving, puzzles — bring situations where players have to think. The key to keep in mind here is that it is not the game master versus the players, but rather the game master providing puzzles that are difficult but not insurmountable — puzzles which will yield to thought and effort. More information is provided in section III, puzzles.
Skill use — situations which bring into play the characters' skills. Locks for a scout to pick. A wilderness trek for a woodsman's wilderness survival skills. A maze to map out. Hidden doors to discover. A quest which brings characters into other lands and requires them to use an interpreter. Et cetera.
Word pictures and stories — role playing is, in a sense, a narrative in the second person, and one attribute