Sofia Nikitchuk of Russia was the runner-up and Indonesia's Maria Harfanti took third place in the final following a lengthy competition featuring 114 women.
Each had won the right to represent their country in a series of local and regional competitions.
The victory marked the first-ever win for a Spanish contestant.
Lalaguna is a 23-year-old model from Barcelona with a degree in pharmacology who plans to pursue a master's degree in nutrition. She placed first in the competition's top model contest and appeared to impress the judges with her public speaking.
Lin is an outspoken critic of Chinese religious policy and a follower of the Falun Gong meditation practice, which was outlawed by China in 1999.
She said that after she won the Canadian title, Chinese security agents visited her father, who still lives in China, in an apparent attempt to intimidate her into silence.
China has hosted the competition seven times, starting in 2003, part of its attempts to project a more modern, outgoing image.
Neither Beijing nor the London-based Miss World Organisation has commented on the controversy.
It was the second consecutive year that outside events intruded on the competition. Last year's contest in London was marred by the murder the month before of Miss Honduras and her sister in that country.
The first Miss World contest was held 64 years ago in Britain.
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