A principle defined by Ron Edwards in his glossary as:
"System (including but not limited to 'the rules') is defined as the means by which the group agrees to imagined events during play." The author of the principle is Vincent Baker, whose Forge username is "Lumpley".
(Actually the author of that particular formulation is Ron Edwards. He named it after me because I provoked him into formulating it, I think. -Vincent Baker?)
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