What is interaction?
I worked in Human-Computer Interface department for several years. My main job was researching start of the art technologies and services, and suggest new business and service for my company. Those readings remind me of the working experience that I physically learned, rather academically learned. Those two descriptions about interaction - listening, thinking and speaking, and relationships with hands- showed their unique perspective to me. (Interesting part was Chris Crawford is one of the first generation game directors, his definition sounded film/drama background to me.) If I translate Chris Crawford's definition to 'input, process, output', it makes sense to me. I guess he tried to make a metaphor. However, as Bret ranted, is physical interaction all about hand manipulation? The reason why we are mostly using 'pictures under glass' is the versatility of the form of tablet to embrace the formal technologies.
My definition of interaction is 'A system that user's reaction can affect to itself' (whether it is physical or not). This definition came from my lifelong experience with video games. The video game is the most common example of interactivity, and that is the reason why I feel games as one of my favorite medium. Among modern pop media, video games keep their unique position as interactiveness. They are different from movies, TV shows, radio, books. Users (even they have a perfect term as players) don't only sit and enjoy the contents, it can make a reaction to the world. That allows the users feel more 'live feeling' in the system. (Cinematic games doesn't give many interactions within.) If I want to limit the definition in the top of the definition of interaction, we need to think about physiology.
Physical interaction between a system and a human (sadly we don't care other interactions that exclude humans) should be an extension of the human organ and an extension of the system at the same time. That means, the interaction should feel like 'natural', 'a part of the body' and 'limb-like', no matter the extension means the extension of vision, auditory, tactile, or thinking. Therefore, my definition of physical interaction is 'An extended system that user's reaction can affect to itself'.
In this sense, the example of non-interactive digital technology is VR. Even though it has some interactions - changing orientation, or some selections - it is very limited. Some VR contents are more equipped than just a headset, it is still just an extension of a feeling, not an interaction, and it is VR's intension so far as well.