A game is, generally speaking, a system for manipulating content on a foundation. For example, Sim City is about placing buildings on terrain. An RPG is actually two or three games, one of which is slotting equipment/skills/spells into "character nodes". An adventure game is about activating content which has been placed on a terrain.
Obviously, games don't let you just go around willy-nilly placing buildings, slotting equipment, and activating content. Instead, they use a variety of rules to limit and direct the ways content acts and reacts. This adds a level of complexity to the game, allowing the content to remain interesting longer. If done right.
There are four kinds of systems used to create these rules. Each kind of system generally requires content to have specific attributes.
1) Global Effects
Global effects are ones which affect the world in some global way. For example, a building which requires 2500 "dollars" to build pulls that money from a global pool. Similarly, in an FPS, getting health adds to your global health pool. Also, a game where a structure can only be placed once, or with a maximum unit cap - these are also global effects.
Generally, content which interacts with rules like this needs to strike a balance between costing and providing global resources. Not that any given piece of content must be balanced, but content in general needs to be balanced. As an example, buildings cost money but provide tax revenue. Monsters cause damage to your global HP supply, but health packs restore it.
This kind of effect is used to unify and centralize content: all content can be related to its global costs and rewards.
2) Local Effects
Local effects are ones which affect the local area only. An example would be if buildings require power to work. It doesn't matter if there's plenty of power on the other side of the map: there needs to be power here. Similarly, if you have four people in your party, equipping one with a better weapon doesn't improve the others. A building might produce traffic locally, and spikes only kill you if you fall on them.
Content with local effects is generally very unbalanced rather than balanced. IE, most content will require specific things, and very few pieces of content will provide them. This unbalance keeps the content somewhat centralized, allowing players to create recognizable and straightforward infrastructures for remarkably large and convoluted systems.
Also, there is generally quite a lot of "enabler" content which allows the infrastructure to be configured more efficiently. An example is highways and power lines in Sim City: they aren't really "buildings", but they allow you to create your infrastructure more efficiently. An interesting thing is that, if given long enough, players will develop their own "enabler" strategies even if you don't include any.
Not all local effects have to be constructive: trampolines, lava, poison, anything with a continuous local effect falls into this category. Things can even move around and have local effects, such as the cats in ChuChu Rocket.
This kind of effect is generally used to create a complex but clear system for challenging players spatially. Some games use "light" local effects to create a kind of "spreadsheet" feel - various locales exist, but don't directly affect each other. This is very common in multi-character RPGs and tactical games.
3) Intermittant Effects
A lot of games use content that only "activates" in specific situations. Instead of merely being local in space, it is also also local in time. Usually, this is a combat situation: a space marine standing around doesn't have a whole lot of local or global effect, but if an alien crests the hill, he shoots it dead. Another example is a security system which activates on a timer. Or random encounters on a world map.
This isn't a one-time effect like burning down, but something which will happen repeatedly if given the chance.
These kinds of effects are used to crank up the tension level, since they generally come up with very little warning and frequently seem somewhat random.
Limits are simply restricting content's availability. The most obvious example is that in many games, you're "stuck" to your character: you can't wander off and interact with things far away. Character-centric games use limits to make players experience content in a specific order.
But there are a lot of different kinds of limits, many of which are indistinguishable from global effects. Generally, if it costs or provides a resource, it's a global effect rather than a limit. So, for example, it costs a certain amount of money to build a starship. That's a global effect. But if you need to have specific things researched before you can build it, that's a limit.
Limits are generally used to create "gates" and "pathways" which the players have to move through. This allows the designers to expose them to specific content at a specific pace.
Nearly all rules in games can be explained using these four systems, and it's actually a lot of fun to take a game and change the systems around. For example, what about a game where instead of concentrating on soldier's intermittant battle effect, you instead concentrate on their local effect? Mob mentalities, branch rivalries, reacting to command staff...
Anyhow, it's kind of interesting and leads into my essay on game-tools, which I'll write sometime soonish.