Free will is an extremely 'meaty' concept. Different christian denominations approach it differently. And in fact it has been a central point of contention in some of the schisms that have occurred over the years.

I don't believe the issue of determinism vs. free will has ever been resolved.

From a religious standpoint, I think the argument would go something like this:

Imagine you're a parent and you are tasked with watching a group of 5 year olds. You take them to a playground and tell them to go wild and do whatever they want. Now, in this example that playground is the whole world to those kids, while the parent is privy to information they are not. You're familiar with all of these children and 'know' what they are going to do (this analogy isn't perfect). So in the eyes of the children, they have all the freedom and are masters of their own world. However, the parent A) granted them this freedom and B) has and understanding of the outside world with which the children can't interact.

So in this example, the entire world is the playground for humans. We are granted freedom in our earthly world (playground) by our master (parent); and to us it is the ultimate freedom, while god is privy to spiritual understanding that we cannot conceptualization. We have freedom but it is constrained by other limitations. And that way free will can exist, just beneath god's will.

Full disclosure, I don't necessarily believe this to be true. Just that I think that's a simplified version of the argument that determinism and free will can exist. They exist on different levels, one of which is beyond our grasp.