Game Development Dictionary
The base unit of a design. This is anything that can react with anything else in any way: For instance in an adventure game, every inventory object, every item that the player can interact with, every NPC and the player themselves are all entities. In a FPS, any missile that an NPC fires is an entity, as is an exploding section of wall or an exploding dustbin. As a game has more entities, the ways that they can react together increases geometrically. Thus entity relationship management becomes necessary.