This was a term penned by Iain M Banks in the brilliant The Hydrogen Sonata, although i'm sure you'll have heard of the theory plenty of times before.
If computer power turns out to be unlimited, then only the software we develop will hold back what technology can do in the future. Assuming we overcome the coding barrier, surely one day we will be able to completely simulate life. This raises a question of marality though, just because this can be done, should it, and what should the regulations surrounding it be?
For example, if you create a simulation of life that includes feelings and emotions, as you would expect a full simulation to do, even if it is a simulation in a virtual world, it is still some"thing" that feels and thinks. So we would be playing god to control, or even observe, the world. As far as its concerned its real, and to inform it that it is infact a simulation would probably skew any outcomes or actions it would take, thus making it a pointless simulation anyway, as the results will not be true to life.
So would turning such a simulation off be classed as murder?
And more worryingly, assuming everything else i said here is true, how could we ever tell if we are or aren't a simulation?