A system is in closed loop when a part of the output signal is used as a feedback to the input. This way, the fraction of the output signal act as a 'error signal' showing the deviation of the output against the expected output, and the feedback is used to correct that deviation. Is like if the control system knows what happen from its actions and can correct.
A servo motor, for example, makes the feedback through position signal using the encoder, so if exist a deviation in position the system is able to correct. Other example could be a ligths system that uses a photocell to test ambient ligth to dim itself and do not waste power.
In a open loop there is no feedback from the output to the input, so the system is blind, there is no way to know if there is deviation from the expected.
The same above examples with open loop is a stepper that has no control over the position, only tries to move where indicated but really do not know where is at any moment. Or in the ligths system, a dimmer but used from other room, so you really do not know if the adjusts are correct.
Hope it helps
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