The enchanted player chooses a permanent to sacrifice from among the creatures and planeswalkers that player controls. You don’t choose which type of permanent the player has to sacrifice.

The enchanted player can’t choose to lose 5 life if they have a creature or planeswalker that can be sacrificed.

There are many important moments in the story, but the most crucial—called “story spotlights”—are shown on cards. These cards have the Planeswalker symbol in their text box; this symbol has no effect on gameplay. You can read more about these events in the official Magic fiction at http://www.mtgstory.com.