Do I need to set limits with my child?
Yes. They need those fences. They need to know the difference between right and wrong. This shows them that you care. Children who are not looked after by their parents, those who roam free, tend not to have any morals or convictions when dealing with right or wrong. They cannot cope in the real world.
"Train up a child in the way he should go, even when he is old he will not depart from it" (Prov. 22:6).
"Endure hardship as discipline; God is treating you as sons. For what son is not disciplined by his father? If you are not disciplined (and everyone undergoes discipline), then you are illegitimate children and not true sons. Moreover, we have all had human fathers who disciplined us and we respected them for it. How much more should we submit to the Father of our spirits and live! Our fathers disciplined us for a little while as they thought best; but God disciplines us for our good, that we may share in his holiness. No discipline seems pleasant at the time, but painful. Later on, however, it produces a harvest of righteousness and peace for those who have been trained by it" (Heb. 12:7-11).
"...one who rules his own house well, having his children in submission with all reverence" (1 Tim. 3:4).