To say that an agent is embodied is, in the most general sense, simply to say that the agent exists in the world. The physical creation of a robot can be important, because basic physical relationships between an agent and its environment can be important determinants of the robot's behavior. For instance, slightly different levels of friction on the robot's components might cause it to turn in ways that would not be revealed if the robot was instead a disembodied simulation.
Interestingly, there is a more technical notion of embodiment. Fong et al. (2003) argue that there is a continuum of embodiment, and that even if a robot is physically constructed this does not mean that it is completely embodied. Instead, embodiment is reflected in the degree to which the robot can affect or manipulate the environment around it. The more embodied a robot is, the more it can influence the world around it.
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