Just because God knows what they are going to do doesn’t exclude people from punishment. People, in general, are punished for their sins. That being said there are two types of people in the world; those who are born again and those who are not.
God’s punishment to non-believers is different than believers. God will punish non-believers for a variety of reasons including immorality and pride. God chastises those who have been reborn to discipline them and assist them in their growth.
”If He didn't want/allow them to do these things, why does He create them?”
Assuming you’re talking about those who have been reborn, it states in scripture the reason we are disciplined for our unrighteousness is that God wish to share His glory.
It is for our good that we receive discipline. But in order to save some He had to create us all.
”I don't believe we have a choice in our actions, because, if God does know what we are going to do before we do it, and if God cannot be wrong....then how can we do anything differently?”
Saying we cannot control our actions is fatalism or determinism. But I would agree that God knows what we are going to do before we do it. It is also safe to say that God has our punishment equally laid out.
Sometimes God gives us a choice as He did with David whether to choose famine, the sword of David’s enemies, or pestilent; but it is silly to think that God did not know which one of the three choices David would select. David had a choice in his actions and he chose the plague. God knew David’s choice the same way as God determined the death of the people who would die and live by the plague. But it was still David’s choice. With your proposal you would be saying David was compelled to choose a plague.
I will agree that here on earth, people, in general, are punished for their wrongdoings. That is how God designed us and our civilisations.
How do you know what happens after death? Can you show this to be true?
Why do you say that it is safe to say that God has our punishment laid out for us? Why would He punish us for doing something that He has designed into us to do?
If God knew what David would do, and He still created David, how did David have a choice? Could David have done something that God knew he would not do?