Ask the average adult what a computer is and they will explain that it is a machine for executing instructions. Ask a child the same question and, although this is probably not the way they will phrase it, you are more likely to be told that a computer is an imagination machine; something that can conjure up an alternative universe before their very eyes.

The image in the adult mind owes its origins to serious applications such as payroll and billing systems, while the child is more likely to obtain the metaphor from games.

The child's view is the correct one. Alan Turing knew this, although I don't think he could have seen the full implications of it. The computer was conceived as a close approximation to a machine that could become any other machine - a Universal Turing Machine.

Any device that carries out a finite mechanical process can be replicated using a computer, so a word processor is what you get when a computer is configured to pretend it is a fancy typewriter. What is special about computer games such as flight simulators and Sim City is that the computer has been configured to behave like many mechanical devices at once - aircraft, clouds, other pilots - and a narrative emerges from the complex interactions between these virtual objects.

In my book about life, both natural and artificial, I argue that under the right circumstances, virtual phenomena, including virtual life forms, are just as real as natural ones, even though they exist in a parallel cyberspace. Several people have asserted that I'm claiming that if some thing looks like and quacks like a duck, then it is a duck. They are missing the point.

When a computer is programmed to behave like another machine, it does not become an instance of that machine; it is pretending. I know that. But many machines in the physical world are not physical things; they are intangible phenomena derived from the interactions between physical things.

Take a company. Companies are things - you cannot point at them but you can count them and label them. And they exhibit behaviour. But a company is not the people or the offices or the legal documents that underlie it. It is defined by the relationships between those parts, not the parts themselves.

In my artificial intelligence (AI) work, I'm interested in the fact that a living, intelligent being is like a company. Its parts are in constant flux but the organism remains a coherent, self-perpetuating entity. My argument is that an organism is not the stuff, but the arrangement of that stuff, which in turn depends solely on the stuff's properties. We can replace the physical parts with other machines that exhibit the same or similar properties, and the result will still be a living, thinking being. These other machines can even be simulated in a computer. They will be pretend nerve cells and chemicals, but the emergent organism will be just as real as one built from physical components and, most importantly, its behaviour will be lifelike and intelligent, rather than simply "programmed in".

But I think this notion extends beyond AI. We know there are limits to what a computer can do, and as the behaviour we wish to elicit becomes more sophisticated, program complexity grows exponentially. Moreover, the more complex a monolithic program becomes, the more liable it is to break down catastrophically. Yet a human being consists of the relationships between a million, million working components, and for the most part we function well.

Our perception of the computer is changing, from instruction-following automation to a cyberspace generator, in which many virtual machines interact to create something bigger, more robust, adaptable and creative. The old monolithic, materialist view has no place in this networked world, and we need to look on the computer as a container for virtual machines, not a mechanical slave. Long live computer games.

• Steve Grand's book, Creation: Life And How To Make It is published by Weidenfeld & Nicolson General