Chris Crawford in The Art of Interactive Design defines interactivity as “a cyclic process in which two actors alternately listen, think, and speak. The quality of the interaction depends on the quality of each of the subtasks (listening, thinking, and speaking)”, and suggests that “we could replace listen, think, and speak with input, process, and output”.
As I see it, Physical interaction could exist between creatures that have an ability to sense the physicality of our world such as people, animals, a person and an animal, or a person and a machine/computer or between machines that have sensory abilities. One side of the interaction will transfer information via a tangible – physical element, letting the other side process the information and composite and deliver a response, which will also be some sort of transferring information (physical or not).
Good physical interaction would create a ‘conversation’ between the participants that are interacting, as Crawford puts it “this process of conversation cycles back and forth, as an iterative process in which each participant in turn listens, thinks, and speaks”. I believe that good physical interaction would engage the participant to a degree in which they are fully tuned to the situation, they would be acting in the present and their attention will be fully taken by the interaction. Bret Victor stress in “A Brief Rant on the Future of Interaction Design” the importance of creating new physical interactions that will make use of the “untapped potential of human capabilities”, letting people manipulating things and experience the vast range of sensing and feeling.