A “closed world” is a radically bounded scene of conflict, an inescapably self-referential space where every thought, word, and action is ultimately directed back toward a central struggle. It is a world radically divided against itself. Turned inexorably inward, without frontiers or escape, a closed world threatens to annihilate itself, to implode.
The term descends from the literary criticism of Sherman Hawkins, who uses it to define one of the major spaces in Shakespearean plays. Closed-world plays are marked by a unity of place, such as a walled city or the interior of a castle or a house. Action within this space centers around attempts to invade and/or escape its boundaries. Its archetype is the siege, with the Iliad as originary model; war, either literal or figurative, is its driving force. Notably, the closed world includes not just the sealed, claustrophobic spaces metaphorically marking its closure, but the entire surrounding field in which the drama takes place. The dividing conflict which drives social action in the closed world finds parallels in the inward psychological division of characters, such as Hamlet, torn between power and the importance of rationality and between the necessity and the choking restriction of social convention. In tragedy this leads to self-destruction (e.g., Hamlet or Romeo) and in comedy to exorcism of these forces (e.g., the punishment of Malvolio).
Paul N. Edwards, The Closed World: Computers and the Politics of Discourse in Cold War America