Summoning all master students

Hello everyone

I would like to ask about the whole second-year of a master degree thing where we're about to work on a project for 9 months! 

Who helps us assign/formulate a question to work on using experiments? What if the question we're going to test out is being worked upon by other labs from other universities? I know what field and what portion of the field I will be working on, but the actual question that would be the title of my thesis is still a blur. My advisor has assigned to me a topic. And told me to read about it. I am reading.  And the information is a little repetitive. And some papers have been painfully detailed. Should I stress on these details? Should I write anything important and document it for later? Or should I just skim through to have an idea for now and then worry about details and writing stuff down? How does reading enough feel? I have rotated in my advisor's lab. And he has  a PhD student working on my topic. We will be overlapping. How would I separate from her work? I could not seem to stop worrying about these issues. Could someone please explain how things go during the second year of a master's degree program? And what we're supposed to be doing to maintain a healthy attitude towards the whole thing and keep it a positive memory rather than a terrifying one with lots and lots of anxiety and panic attacks?

Many thanks in advance