In our previous paper, ‘The Nature of Physical Reality’, we have shown that we live in a non-physical world. Things exist only as potentialities in our universe. Interaction between the potential properties of the observed and observer manifests the apparent form of the objects. In other words, an act of observation does not produce an entity; it only manifests entity being observed.
In this paper, we have explained the nature of reality.

René Descartes’s approach of dividing the whole into parts to understand the behavior of the whole, and his division of the world into two independent and separate realms – that of mind and that of matter have been the guiding principles for science in general and physics in particular.
Classical physics
Inert systems do not possess mental faculties. Therefore, behavior of physical systems can be explained through simple physical laws.
Quantum mechanics suggests that an act of observation produces what is being observed. We have shown that this observation applies even in the macro world. Therefore, Observer emerges as the central figure in the physical world.
All systems in the universe are sub-systems of the universe.
Process of evolvement of the universe is explained through the second law of thermodynamics. Second law of thermodynamics describes a process through which universe is achieving greater equilibrium in its structure. In other words, the universe is constantly moving towards the state of higher entropy.
Physics also assumes that the whole is merely sum of its parts (basic building blocks of the universe); therefore, we can understand the behavior of the whole by examining its parts. However, we have explained the scientific basis of Aristotle’s observation that the whole is greater than the sum of its parts. Therefore, it is not possible to understand the whole by examining its parts.
The universe as a whole is transforming from one state to another through a process described by the second law