What is a Physical Symbol System?
Here is Simon's own description.
A physical symbol system holds a set of entities, called symbols. These are physical patterns (e.g., chalk marks on a blackboard) that can occur as components of symbol structures. In the case of computers, a symbol system also possesses a number of simple processes that operate upon symbol structures - processes that create, modify, copy and destroy symbols. A physical symbol system is a machine that, as it moves through time, produces an evolving collection of symbol structures. Symbol structures can, and commonly do, sever as internal representations (e.g., "mental images") of the environment to which the symbol system is seeking to adapt. They allow it to model that environment with greater or less veridicality and in greater or less detail, and consequently to reason about it. Of course, for this capability to be of any use to the symbol system, it must have windows on the world and hands, too. It must have means for acquiring information from the external environment that can be encoded into internal symbols, as well as means for producing symbols that initiate action upon the environment. Thus it must use symbols to designate objects and relations and actions in the world external to the system,
Symbols may also designate processes that the symbol system can interpret and execute. Hence the program that governs the behaviour of a symbol system can be stored, along with other symbol structures, in the system's own memory, and executed when activated.
Symbol systems are called "physical" to remind the reader that they exist in real-world devices, fabricated of glass and metal (computers) or flesh and blood (brains). In the past we have been more accustomed to thinking of symbol systems of mathematics and logic as abstract and disembodied, leaving out of account the paper and pencil and human minds that were required to actually bring them to life. Computers have transported symbols systems from the platonic heaven of ideas to the empirical world of actual processes carried out by machines or brains, or by the two of them working together.

Three Techniques of AI are:

• Search

• Use of Knowledge

• Abstraction