In the past, we determined that The GM is Always Right is stemming from the early heydays of Dungeons and Dragons and its origin in games like Chainmail, though the Braunstein games might also be a way it came to be.
In either way, many of the more modern editions of games have lines that account to "If you don't like the rule, change them". As far as I found, these calls are usually are in the GM chapter. Some examples (and yes, Paranoia's call is both GM is always right AND change the rules):
- Werewolf the Apocalypse 20th anniversary edition (2012) page 231
The rules are what you make of them.
- Exalted 2nd Edition (2008) page 260
Take what you need, ignore what you don’t, and run the best damn Exalted game you and your players can come up with.
- Paranoia: Troubleshooters 25th Aniversary Edition (2009) p40
We have tried to make the rules as helpful and powerful as we can, but if you don’t like a rule, the rule is wrong.
However, when grabbing older game manuals such callouts to just alter the rules seem absent:
The 1999 core rulebook for the 3rd edition of MechWarrior, I could find a direct callout to GM as a referee on page 203, but no make the rules fun or change the rules as needed like in the more modern editions.
Shadowrun First edition (1989) has its GM chapter starting on page 152 and again, calls out the GM as a referee with a sentence describing pretty much "A good GM listens, then decides and is right". The rest of the chapter is dedicated to giving advice for the GM and how to determine difficulties and such, but no direct callout to if you don't like the rules, change the rules.
The 1981 Bushido on the other hand does always speak of itself as if the book is the final authority and does not even have a GM chapter in "Book I". That is all put into "Book II", together with the land. There is no flexibility given to the GM. Or the role even described as something of an arbitrator.
So, when and where was the first call out to a GM to just change the rules in case it would benefit the game/narrative in some way or another?