Finite State Machines are not really machines at all.
Rather,
they are programs that do certain things at certain times depending on
what is happening. For instance, a boxing game with a finite state
machine would perform a certain action (via encoded list processing)
when the opponent was attacking than when the opponent was on defense.
Finite state machines tie all the other aspects of AI together, in
that they allow the computer to utilize deterministic algorithms,
random logic, and encoded list processing all at once, using each when
it is most appropriate. In this fashion FSM's, as they are called,
imitate more closely the human mind, which has many different states
(moods, emotions, etc.) that affect its actions.