The Agent Loop in Plain Terms: Perception, Memory, Tools, Planning

Agent glossaries list twenty terms as if each were a separate invention. They are not. They are names for the parts of one loop, and once you see the loop, you can place every new buzzword in it within a few seconds.

The loop

          +----------------------------+
          |          GOAL              |
          +-------------+--------------+
                        v
   +--> OBSERVE  (perception, state, memory)
   |        v
   |     THINK   (reasoning, planning, chain of thought)
   |        v
   |     ACT     (tool call, message, handoff)
   |        v
   +--- CHECK    (observe result, evaluate, learn)

An agent keeps cycling until the goal is reached, it gives up, or a limit stops it.

Where each term lives

The two patterns worth knowing by name

Chain of thought. Ask the model to show intermediate steps and multi-step problems get more accurate: arithmetic, logic, planning. It costs tokens and time, so skip it for simple lookups.

ReAct. Interleave reasoning and acting: write a short thought, call a tool, read the observation, think again. Because each step is anchored in real tool output rather than the model’s guess, it reduces invented facts compared with long unbroken reasoning.

Thought: I need the current price before I can compare.
Action: search("ACME laptop price")
Observation: $1,199 at store A, $1,149 at store B
Thought: Store B is cheaper. Check shipping.
Action: ...

Scaling past one loop

• Orchestration: coordinating steps, tools or agents to complete a task pipeline.
• Handoffs: passing responsibility from one agent to another, for instance from a triage agent to a billing specialist.
• Multi-agent systems: several agents sharing an environment and collaborating.
• Swarm: many simple agents following local rules without central control.
• Agent debate: agents argue opposing views to improve an outcome.

Each of these multiplies the loop, and each handoff is a place for context to be lost or misunderstood.

Takeaway

Forget the twenty-item glossary. Remember one loop: observe, think, act, check, repeat. Every term, from memory to ReAct to handoffs, is a name for one part of that loop or a way of stacking several loops. Place a new buzzword in the loop and you know what problem it claims to solve.